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Documente Profesional
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Sources:
Managerial Economics by Edwin Mansfield and Economics by Paul
Wonnacott/Ronald Wonacott
Public goods in its broad definition
is
Non-rivalry:
The characteristic that if one person consumes a
good, another persons pleasure is not diminished,
nor is another person prevented from consuming it.
Example of a public good:
Lighthouse
- Once it is built, no sailor can be
excluded from using its services. All
sailors are protected from the rocks
whether or not they helped to pay
for it.
Other Examples of Public Goods:
National defense
Public fireworks display
Flood-control dam
Roads and highways
Information goods
PUBLIC GOODS VS. PRIVATE GOODS
Public Good No ability to exclude and no rivalry for
benefits.
Private Good Clear ability to exclude and rivalry for
benefits.
Non-excludable Non-excludable
Rival Non-rival
Clean air and water (Pure Public Good)
National Defense
The end
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