Public Goods Assignment Help

Assignment Help: >> Theory of market failure - Public Goods

Public Goods:

A pure public goods is defined, as goods that one person's consumption of the goods does not reduce the amount available to others i.e. the consumption of a public good is non-rival. The benefits are available to all without mutual interference. Thus supplies of these goods are available to each person in community.

Example

A television signal that is available to one person can be made available to all people in the area within the range of the signal. Signal used by one viewer does not reduce the amount of entertainment for others.

a) A road used by one person is same as used by another person.
b) A park constructed in a locality provides satisfaction to all those people who stay near by and prefer to use park.

Prof. Musgrave called public goods as social wants and was of the view that they should be satisfied by the government. According to him, "Private wants are provided for adequately by the market. Social wants must be satisfied through the budget, if they are to be satisfied at all". 

However, a public good does not necessarily refer to a good that is provided by the government. Instead it refers to a good (or service) that has two characteristics:

1) Non- rival consumption

2) Non-exclusion.

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