Question

Private supply of public goods is most likely to result in less than the efficient level...

Private supply of public goods is most likely to result in

less than the efficient level of output, due to the free-rider problem

less than the efficient level of output, due to the problem of insufficient competition

more than the efficient level of output, due to lower costs of private firms

more than the efficient level of output, due to the existence of externalities

an overuse of these goods.
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Answer #1

Private supply of public goods is most likely to result in;

Answer: Option A : less than the efficient level of output due to free-rider problem.

Explanation: It is because of the reason that the main two characteristics of the public goods are; non-rivalrous and non-excludable in consumption. Private supply of public goods result in the production less than the efficient level. And the free rider problem indicates a market failure were the distribution of goods and services become inefficient and it is caused by the unequal consumption of the some individuals greater than the fair and equal share. Hence the first option is the right one.

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