Why would it be inefficient for the government to charge a price for consuming a public good such as national defence?
A)Too much defence will be provided.
B)The price cannot be set to cover all defence costs.
C)No one will be willing to pay to consume any national defence.
D)The marginal cost of providing national defence is zero.
E)Too little national defence will be provided.

Question

Quizplus · Accepted Answer

Public goods like national defence have a marginal cost of zero for additional consumers, meaning charging a price would be inefficient as it would exclude some from benefiting without reducing the cost of provision.

Why Would It Be Inefficient for the Government to Charge