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In the absence of government action, the private market would probably not provide as much police protection as is socially desirable because: a
In the absence of government action, the private market would probably not provide as much police protection as is socially desirable because:
a. the private benefits are greater than the private costs of providing police protection.
b. individuals are too poorly informed about the value of 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.
Expert Solution
c. it is difficult to prevent free riders from benefiting from some police protection services
Free riders are the people who enjoy the benefit of the activity without paying any price for it. For example, all the people in the society enjoy the street lights but it is only a few who pay taxes to the authority. The free-rider problem increases the cost to the supplier as they pay nothing in exchange for the benefit. This is the reason why private firms refrain from providing social benefits like police services. Private firms are into profit-making and they do not wish to entertain free riders in the market.
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