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Economics · Oct / Nov 2022 · Paper 13 · Question 23

2281Market failure

Why does a government provide public goods?

  1. APublic goods are always used by everyone.
  2. BPublic goods are not profitable for private firms.
  3. CPublic goods can only be provided by monopolies.
  4. DPublic goods create large external costs.

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Correct answer: B. Public goods are not profitable for private firms.

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