Explain the difference between private and public goods

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People have a demand for cars, and a market economy provides sweaters. There is evidence that people also have a demand for national defense, in that they are willing and able to spend some of their money on defense. But unlike cars, which are produced and sold by private companies, national defense is paid for by the government. Why is that? In your response, briefly explain the difference between private and public goods, and why the free rider problem undermines the provision of public goods.

Reference no: EM131161305

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