In the absence of government action, the private market would probably not provi

Question

In the absence of government action, the private market would probably not provide as much police protection as is socially desirable because: Select one: a. individuals are too poorly informed about the value of police protection. b. the private benefits are greater than the private costs of providing police protection. c. it is difficult to prevent free riders from benefiting from some police protection services. d. the use of police services by one person will significantly reduce the police protection available to others.

Explanation / Answer

As we know that “Police Protection Service” is a public good, => there is a free rider problem, => people don’t want to revel their true willingness to for it, => in the absence of the government the optimum output will be less than socially optimum. So, here the correct option is “C”.

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