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Public goods are examples of market failure because the ______ _____ cannot distribute the ______.

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Jawaban

Free Market Efficiency Side Effects

Penjelasan

Step1:
Identify the Concept of Public Goods

Public goods are non-excludable and non-rivalrous, meaning they are available to everyone and one person's use does not reduce availability to others.

Step2:

Understand Market Failure

Market failure occurs when the market does not allocate resources efficiently, leading to overproduction or underproduction of goods and services.

Step3:

Connect Public Goods to Market Failure

Since public goods are non-excludable and non-rivalrous, the free market often fails to provide them efficiently due to the lack of incentives for private producers.

Step4:

Identify the Missing Elements
The free market efficiency side effects refer to the inability of the market to distribute public goods efficiently.
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