Free Market vs Planned Economy
Provision of public goods
These are goods that are non rivalry in consumption and non excludability as alluded by Stanlake (2000) He also added the examples of public goods which includes national defences, the police service, flood control schemes, street lighting, pavements and public drainage hence they often have large external benefits relative to private benefits. In a market economy, production of public goods will not be provided or is limited because producers cannot withhold the goods for non –payment since there is no way of measuring how much a person consumes, there is no basis for establishing a market price. However in a planned economy there is provision of such goods because the government makes all decisions on what is produced. Hall (2010) mentioned that public goods cannot be provided privately because of their non diminishability and non –excludability that
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