ECO 1102 Chapter Notes - Chapter 11: Peanut Butter Cup, Private Good, Market Failure

• School: University of Ottawa
• Department: Economics
• Course: ECO 1102
• Professor: David Gray

Document Summary

The difference between public goods and private goods lies mostly on the d side as opposed to the s side. The best way to think of them is in contrast to private goods. Market failure: any situation in which unregulated markets fail to bring about a socially desirable outcome. Efficiency, whereby the output level is such that mb = mc. So far we have studied private goods, which have two features (figure 11. 1) rivalry in consumption: one person"s consumption infringes upon somebody else"s consumption of the good. Danny sternglass and my reese"s peanut butter cup (once he stole it from me and ate it, i no longer had any use for it) excludability in consumption: possible to prevent someone from consuming it. He/she who pays for it uses it, and he/she who does not pay for it does not have a right. I do not live in rockcliff park because i cannot pay.