What is a public good?
Q: What is a public good?
A: A public good is a kind of common good that has two main properties - it is non-excludable and non-rivalrous.
Q: What are some examples of public goods?
A: Examples of public goods include fresh air, knowledge, street lighting, a fireworks display, flood control, public water supplies, national defense services, parks, and other public recreational areas.
Q: Why are public goods an example of market failure?
A: Public goods are an example of market failure because if all actors maximize their gain, it does not produce an efficient solution. This is because it is impossible to make a profit from public goods as they are non-excludable and people who have not paid for the goods can still consume them.
Q: Why does the government intervene to provide public goods?
A: Public goods are usually under-consumed in the market mechanism because of positive externalities in consumption. The government intervenes to provide public goods because the Marginal Social Benefit is greater than the Marginal Private Benefit.
Q: What is the main difference between public goods and private goods?
A: The main difference between public goods and private goods is that public goods are non-excludable and non-rivalrous, whereas private goods are both excludable and rivalrous.
Q: Why do producers not see a benefit in providing public goods on the market?
A: Producers do not see a benefit in providing public goods on the market because they are non-excludable and non-rivalrous. It is impossible to make a profit from providing public goods because people who have not paid for the goods can still consume them.
Q: Are there many examples of purely public goods?
A: There are relatively few examples of purely public goods, but some examples include flood control, national defense services, and public recreational areas.
