ECON 304 Lecture Notes - Lecture 27: Private Good, Marginal Cost, W. M. Keck Observatory
23 Oct 2020
School
Department
Course
Professor
Document Summary
A good is rivalrous if its consumption by an individual prevents someone else form consuming it. You and your friend both can"t eat it at the same time. A good is excludable is you can exclude someone else from consuming it. You can exclude your neighbour from eating it. Pure public goods: pure public goods represent goods that are perfectly non-rivalrous and non-excludable. For example, the lighthouse in the sydney harbour. It is non-rivalrous as a boat benefiting from its guiding at night does not impede other boats from benefiting as well. It is non-excludable as no one can exclude a boat from benefiting from the lighthouse. Non-rivalry: one individual"s consumption of the good does not impede another individual from consuming it as well: the marginal cost of providing the public good to an additional individual is equal to zero. Non-excludability: no one can be excluded from consuming the good. Instead, impure public goods are much more common.
