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Managerial Economics · End Term · 31 Aug 2025 · May 2025 term · Set QIA1

Managerial Economics End Term 31 Aug 2025 — Question 34

Question 34

+1 markOne correct option

Public goods are provided by the government because

  1. A

    Private firms do not take into account the impact of external costs.

  2. B

    Governments are more efficient than private firms at producing public goods.

  3. C

    People value national defence very highly.

  4. D

    Private firms will make an economic profit.

  5. E

    free-rider problems result in underproduction by private markets.

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Correct answer

  • E

    free-rider problems result in underproduction by private markets.

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Question 34 of 37 in the IIT Madras BS Managerial Economics (Managerial Economics) End Term paper sat on 31 Aug 2025, in the May 2025 term (IIT M IMPROVEMENT FN EXAM QIA1 31 Aug 2025). It carries 1 mark.

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