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A sprinkler system inside of one house does not protect houses on the other side of town. It also requires the homeowner to purchase and install it prior to benefiting from it. Once installed it can help stop fires from jumping to neighboring homes. Given this information we can argue:
A. There may be justification for government intervention to encourage consumption of indoor sprinkler systems due to their public good nature of being non-rival and non-excludable.
B. There may be justification for government intervention to encourage consumption of indoor sprinkler systems due to positive externalities.
C. There is no justification for government intervention to encourage consumption of indoor sprinkler systems as there is no market failure.
D. There may be justification for government intervention to encourage consumption of indoor sprinkler systems due both to positive externalities and that they are public goods.
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