Microeconomics
5th Edition
ISBN: 9781319098780
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
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Question
Chapter 17, Problem aWYWL
To determine
Difference between public good and private good.
Expert Solution & Answer
Explanation of Solution
Public Good:
The good that can be used by everyone simultaneously without reducing the supply for the others. Everybody can use it even if they do not pay for it. So a pure public good is Non rival and non excludable.
Private Good:
The good that cannot be used by everyone simultaneously without reducing the supply for the others. Only the people who pay for it can use it. Others cannot. So a pure public good is rival and excludable.
Difference between Public Good and Private Good
| Public Good | Private Good |
| Public good is non Rival | Private Good is Rival |
| Public Good is non excludable | Private Good is excludable |
| Free rider problem exist | Free rider problem does not exist |
Economics Concept Introduction
Concept introduction:
Public Good:
The good that can be used by everyone simultaneously without reducing the supply for the others. Everybody can use it even if they do not pay for it. So a pure public good is Non rival and non excludable. Ex- defense, clean air
Private Good:
The good that cannot be used by everyone simultaneously without reducing the supply for the others. Only the people who pay for it can use it. Others cannot. So a pure public good is rival and excludable.
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