POL224Y1 Lecture Notes - Lecture 12: Marginal Cost, Egerton Ryerson, Prescription Drug
Document Summary
If you aren"t the deciding factor, you don"t have much of an incentive. Goods that benefit everyone and require collective financing won"t be produced in sufficient quantity by the market. There would not be sufficient market demand for them --> would result in market failure. Can we provide the good/service to more people at no additional cost. Can we prevent non-payers from enjoying the good / service. Common goods, fishing and hunting grounds, natural resources, hard to exclude people from using. Club goods (gym, cable television station, showing of movies), doesn"t cost more to run more or have more people sign up. Pure public goods, clean environment, food safety risk assessment, contagious disease prevention. Pure public goods may not be produced in sufficient quantity in a private market. Has justified the intervention of the state to impose the costs on. Has justified the intervention of the state to impose the costs on everyone.
