Question

Private producers have no incentive to provide public goods because A. the government subsidy granted is usually insufficient to enable private producers to make a profit. B. production of huge quantities of public goods entails huge fixed costs.

Answer 1

Private producers have no incentive to provide public goods because

B. production of huge quantities of public goods entails huge fixed costs.

Step-by-step explanation:

There is rivalry in the production and consumption of private goods. This rivalry is generally described as competition. Most public goods are produced naturally or provided by the government to her citizens. Since they are made available for the welfare of the people, there is usually no cost recovery or exclusion of persons based on financial affordability. But private goods are manufactured and sold by private companies or individuals for a profit motive.