Public Goods

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Public Goods

Public goods cause market failure due to the problem of missing markets - the main characteristics of public goods are:

  • Non excludability
  • Non rival consumption
  • Non rejectable

Quasi public goods are between a public good and a private good

  • Semi non rival
  • Semi non excludable

The free rider problem: because public goods are non excludable it is difficult to charge people, it leads to under provision of a good which equals market failure

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