Public/private goods

• Public good


  A non-rival and non-excludable good that is beneficial to society

  e.g. streetlights, public parks
• Private good


  A good that is owned by a firm and is produced in order to generate profits. The good is excludable and rival in consumption
• "Free rider" problem occurs when a private good is non-excludable, so everyone can still access the good without paying.

  Overtime, the costumers thart are paying for the good will stop and the firms will stop producing the good which will become under-provided and will result in a missing market
• Quasi-public goods


  Non-pure public goods that have characteristics of public and private goods
• Quasi-public goods are partially provided by the free market and have elements of non-excludability or non-rivalry
• Semi-non-excludable

  It is possible to exclude non-paying consumers but often difficult and expensive

  e.g. motorways using tolls
• Semi-non-rival


  At high levels of demand, consumption by one individual can reduce the benefit to others by limiting the availability 

  • e.g. congestion on roads
• Technology is often non-rival but excludable
• TV broadcasting, once considered non-excludable, can now be made excludable through subscription services. It excludes consumers who are not willing to pay
• Technology can be used to minimise the free-rider problem associated with public goods 

  • e.g. number-plate recognition at the tolls to reduce the congestion