Hello! Public goods are goods that are 1) non-rivalrous and 2) non-excludable. Non-rivalrous means that continuous consumption of these goods will not diminish its quantity for other consumers while non-excludable means that consumers (regardless of whether or not they paid) cannot be excluded for consuming the good. Software is an example of a public good.
Now, because of the non-exclusion nature of these goods, private firms will have the free-rider problem (those consumers who use the good without paying). Because of the non-rivalrous nature they are also bound to have a huge demand and therefore they will have a tendency to underproduce hence these goods will be unprofitable.
Lastly, since not all is bound to pay for these public goods, the price system cannot assign the cost to all consumers.
This leaves us with choice D as the only reason why private firms do not produce public goods.
ANSWER: D. the government refuses to grant subsidies to firms who provide public goods
<span>decrease in price of a substitute.
increase in price of a complement.
decrease in consumer income if the good is a normal good.</span>
The answer is True
Answer:
the budgeted cost of goods sold is $9,600
Explanation:
The computation of the budgeted cost of goods sold is shown below:
As we know that
Budgeted cost of goods sold = Beginning inventory + Purchase - Ending Inventory
= $2,400 + $8,600 - $1,400
= $9,600
Hence, the budgeted cost of goods sold is $9,600
Answer:
present value of given cash flow is = $818709.71
Explanation:
given data
rate = 5%
no of period NPER = 35 ( 65 to 100 )
PMT = $50,000
solution
we get here present value of cash flow that is calculated as excel function
pv(rate, NPER, PMT,FV,type)
here future value and type is 0
so put here value
pv(5%, 35, $50000, 0, 0)
so present value of given cash flow is = $818709.71