Question

Most people will not pay privately for police services because the question content area bottom:

a. marginal social benefits are less than the marginal social cost.
b. marginal private benefits are less than the marginal private cost.
c. marginal private benefits are greater than the marginal social cost.
d. marginal external benefits of security are zero.
e. marginal social benefits equal the marginal social cost.

Answer 1

Most people will not pay for private police services because the marginal social benefits are perceived to be less than the marginal social cost, implying a lack of proportional societal gain relative to the cost. The correct option is a.

Step-by-step explanation:

The student is asking why most people will not pay privately for police services. Using the concept of marginal analysis, we know that if the marginal cost (MC) of producing a good is greater than the price (P) people are willing to pay, then the social costs of producing the good exceed the social benefits, and society should produce less of it. Conversely, if P > MC, society would benefit from more production.

Therefore, most people will not pay for private police services because the marginal social benefits of private security are considered to be less than the marginal social cost, meaning society does not benefit proportionally for the cost incurred for private services.

Hence, Option a is correct.