Public Goods
Market Failure: Public Goods
AO2
Syllabus requirement
Defined by being non-rivalrous (one person’s use doesn’t reduce availability for others) and non-excludable (people cannot be prevented from using it).
Assessment objectives
AO2 Application and Analysis
Summary
This topic explains public goods: goods that are non-rivalrous and non-excludable so one person's consumption does not reduce availability for others and non-payers cannot be prevented from enjoying them. Public goods create provision problems for private firms and often generate positive externalities of consumption, which is why governments commonly provide or finance them. The topic distinguishes pure public goods from impure (quasi-) public goods and contrasts public goods with private goods.