Free government provision removes price-based rationing

Steps:

• Private market uses price to ration healthcare at equilibrium quantity where demand equals supply.
• Government provides the same equilibrium quantity but free, setting consumer price to zero.
• At zero price, no payment barrier limits access to the provided amount.
• Allocation shifts from price to direct provision, eliminating market rationing.

Why D is correct:

• Economic rationing allocates scarce goods via price in competitive markets; free provision bypasses this, directly supplying the fixed amount without price exclusion.

Why the others are wrong:

• A: Healthcare remains rivalrous and excludable, not fitting public good definition (non-rival, non-excludable).
• B: External benefits (e.g., herd immunity) persist regardless of provision method.
• C: Quantity is fixed at market level, preventing excess consumption beyond supply.

Final answer: D