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Explain why the private sector is reluctant to produce public goods.

User Ern
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Answer:

The private sector is reluctant to produce public goods because their key characteristics, nonexcludability and nonrivalrousness, make it difficult to sell them to individual customers.

Step-by-step explanation:

Nonexcludability means one person cannot prevent others from using the good, such as good air. Non rivalriousness means one person using a good does not prevent others from using it, such as a the beautiful view of a monument. Because people can free-ride (using the goods without paying), firms do not profit.

User Insung
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