Public good
Definition. A public good is a good that is both non excludable, meaning non payers cannot be prevented from consuming it, and non rivalrous, meaning one persons consumption does not reduce the amount available to others. Because of these properties, private markets fail to provide such goods.
Non excludability causes the free rider problem, so firms cannot charge a price and have no profit incentive to supply the good. National defence and street lighting are standard examples requiring government provision.
This term belongs to Public Goods in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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