The private market would not supply the optimal amount of national defence because:
A)private citizens don't value national defence enough to cover the cost of private provision
B)no-one has the right to attach a price to it and profit from its use
C)private suppliers are unable to produce national defence
D)the government would quickly take advantage of the profit opportunity and undersell to the private suppliers

Question

Quizplus · Accepted Answer

National defence is considered a public good, meaning that it is non-excludable and non-rivalrous. This means that once the government provides national defence, everyone benefits from it regardless of whether they paid for it or not, and it does not reduce in quality or quantity for others to use. A private market cannot provide an optimal amount of national defence because it cannot exclude non-payers and, therefore, there would be a free-rider problem where people would benefit without paying. Additionally, allowing profit from national defence raises ethical and moral concerns, as it could incentivize war or promote inequality in access to defence.

The Private Market Would Not Supply the Optimal Amount of National