Final answer:
The private market tends to underprovide public goods because they are non-excludable and non-rivalrous, leading to market failure where these goods are not supplied at an optimal level without government intervention.
Step-by-step explanation:
The private market tends to underprovide public goods. This is because public goods have characteristics such as non-excludability and non-rivalry, making it difficult for private firms to exclude non-payers and thus charge for their use. Public goods often result in market failures where the private market does not supply these goods at an optimal level, leading to underprovision. In contrast, the government can step in to ensure that an adequate level of public goods is provided. A classic example of this is local government services like garbage collection, which can be provided directly by the government, through private firms under contract, or by a mix of both. The public sector may potentially compete with private firms to ensure efficient provision in specific cases.