Explanation:

Statement 1st is incorrect: Public goods cannot be provided through a market mechanism as they are non-excludable and non-rivalrous in nature. Since it is not possible to exclude anyone from using the good, it is not possible to charge a price for it and thus must be provided by the government. This is known as the “allocation function” of the government.

Statement 2 is incorrect: Public goods such as roads, public parks, highways, railways are for the benefit of all. The consumption of such goods by several individuals is not “rivalrous” in the sense that a person can enjoy the benefits without reducing their availability to others.

Statement 3 is correct: In case of private goods if one does not pay then one can be excluded from enjoying its benefits. However, in case of public goods there is no feasible way of excluding anyone from enjoying its benefits. Thus, non-payers cannot be excluded.

• Since public goods are “non-rivalrous” and “non-excludable” it becomes difficult to collect fees for the public goods. This leads to a problem of “Free-reider”. Since consumers will not voluntarily pay for what they are getting for free it breaks the link between producers and consumers and therefore the government must step in to provide for such gods. This is known as “Public provisioning”.

Hence option 3rd is correct.