Why do public goods demonstrate the limitations of a free market economy?

A. They allow consumers to make all of the economic decisions.
B. They allow government to make some economic decisions.
C. They allow government to control most economic decisions.
D. They prevent cosumers from making ecenomic decisions.

I think its C because they do allow government to control most economic decisions :0

The correct answer is B. They allow government to make some economic decisions.

Public goods, such as national defense, roads, and clean air, are goods or services that are non-excludable and non-rivalrous. This means that individuals cannot be excluded from using them, and one person's use of the good does not diminish its availability to others.

Free market economies rely on the principles of supply and demand to allocate resources efficiently. However, public goods create a challenge for the free market because they do not have a price attached to them and cannot be provided through voluntary exchanges between buyers and sellers.

Since public goods are non-excludable, individuals who benefit from them cannot be denied access, regardless of whether they contribute to their provision. This leads to a free rider problem, where individuals have an incentive to avoid paying for the good and instead rely on others to fund its provision.

To address this market failure, governments play a role in providing public goods. They levy taxes or other forms of revenue collection to finance the production and maintenance of these goods. By doing so, they ensure that public goods are provided for the benefit of all citizens, even those who do not directly contribute to their provision.

So, public goods highlight the limitations of a free market economy because they require government intervention to ensure their provision and because they cannot be efficiently allocated and sustained through voluntary market transactions alone.