When Entrepreneurs Use Advertising to Pay for the Provision of a Public

Multiple Choice

When entrepreneurs use advertising to pay for the provision of a public good, the outcome is typically:

A) efficient because the market price is zero and hence equal to the marginal cost of providing the public good.
B) efficient because the market price is equal to the benefits received from the public good.
C) inefficient because people are not paying for the benefits that they receive from the public good.
D) inefficient because while advertising generates some revenue for the producers, it typically does not generate enough to equal the social benefits received from the public good.