Passage Three
Public goods are those commodities whose enjoyment nobody can be effectively excluded. Everybody is free to enjoy the benefits of these commodities and one person’s use does not reduce the possibilities of anybody else’s enjoying the same good.
Examples of public goods are not as rare as one might expect. A flood control dam is a public good. Once the dam is built, all persons living in the area will benefit---regardless of their own contribution to the construction cost of the dam. The same holds true for highway signs or aids in navigation. Once a lighthouse is built, no ship of any nationality can be effectively excluded from use of the lighthouse for navigational purposes. National defence is another example. Even a person who voted against military costs or did not pay any taxes will benefit from the protection afforded.
It is no easy task to determine the social costs and social benefits associated with a public good. There is no practicable way of charging drivers for looking at highway signs, sailors for watching a lighthouse and citizens for the security provided to them through national defence. Because the market does not provide the necessary signals, economic study is to be replaced by the impersonal judgment of the marketplace.

The word “holds” in Line 4 of Paragraph 2 could best be replaced by __________.