Chapter 8
Market Failure: Public Goods and Common Resources
Book
Version 3
By Boundless
By Boundless
Boundless Economics
Economics
by Boundless
Section 1
Public Goods
![Thumbnail](../../../../../figures.boundless-cdn.com/20222/square/goods.jpeg)
Defining a Good
There are four types of goods in economics, which are defined based on excludability and rivalrousness in consumption.
![Thumbnail](../../../../../figures.boundless-cdn.com/20236/square/cream-cone-285076899310-29.jpeg)
Private Goods
A private good is both excludable and rivalrous.
![Thumbnail](../../../../../figures.boundless-cdn.com/20233/square/t-pont-des-catalans-sunset.jpeg)
Public Goods
Individuals cannot be excluded from using a public good, and one individual's use of it does not limit its availability to others.
![Thumbnail](../../../../../figures.boundless-cdn.com/20341/square/-quantity-of-a-public-good.jpeg)
Optimal Quantity of a Public Good
The government is providing an efficient quantity of a public good when its marginal benefit equals its marginal cost.
![Thumbnail](../../../../../figures.boundless-cdn.com/20399/square/samuelson-condition.jpg)
Demand for Public Goods
The aggregate demand curve for a public good is the vertical summation of individual demand curves.
![Thumbnail](../../../../../figures.boundless-cdn.com/20463/square/auto-stoped-highway.jpeg)
Cost-Benefit Analysis
The government uses cost-benefit analysis to decide whether to provide a public good.
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Boundless Economics
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