Government provides certain goods and services which cannot be provided by the market mechanism i.e. by exchange between individual consumers and producers. Which of the following is related to public goods?
Government provides certain goods and services which cannot be provided by the market mechanism i.e. by exchange between individual consumers and producers. Which of the following is related to public goods?
Solution
✅ Correct Option: 3
Public goods are non-excludable and non-rivalrous: there is no feasible way of excluding anyone from enjoying their benefits, and one person's consumption does not reduce availability for others (e.g. national defence, roads). Options 1, 2 and 4 describe excludability and rivalry, which characterise private goods.
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