Producers have little incentive to produce a public good because:

• A. public goods are always unprofitable to produce
• B. they cannot easily exclude non-payers from benefiting from the good
• C. the government always provides public goods for free
• D. consumers are willing to pay more for private goods

Answer: (B)

Verified step by step guidance

1. Understand the definition of a public good: it is a good that is non-excludable and non-rivalrous, meaning that people cannot be easily prevented from using it, and one person's use does not reduce availability to others.
2. Recognize that because public goods are non-excludable, producers cannot easily charge consumers who benefit from the good, leading to the 'free rider problem' where individuals consume without paying.
3. Analyze why this free rider problem reduces producers' incentives: since they cannot ensure payment, producing the good may not be profitable or financially sustainable.
4. Consider the other options and why they are less accurate: public goods are not always unprofitable by definition, governments do not always provide them, and consumer willingness to pay more for private goods does not directly explain producers' incentives for public goods.
5. Conclude that the key reason producers have little incentive to produce public goods is because they cannot easily exclude non-payers from benefiting, which undermines their ability to earn revenue.