Homework Answers
Question 9) option C)
National defence is a public good, bcoz it is both non rival & non excludable .
So national defence is provided by the government, bcoz free-riders make it difficult for private markets to supply the socially optimal quantity.
Private market provision of national defence , hence public good will be less than the social optimal , & thus it will be less efficient.
Bcoz though voters are well informed but they all want to free ride, they don't want to pay for it , & just want to enjoy public good , assuming that others will pay .
So only govt can provide the efficient quantity
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