Explain why public goods must be provided by the government.
A good that is non-rival and non-excludable is referred to as
public good. Non-rival means that consumption by one individual
does not affect the consumption of another individual. Whereas,
non-excludable implies that no individual can be excluded from
using the good. For example, parks, roads, national defence, etc.
These goods must be provided by the government because of the
1. The benefits of public goods can be easily enjoyed by anyone
without affecting the consumption of other individuals. There
arises market failure.
2. No individual can be excluded from using public goods as it is
available to all. The link between the producer and the consumer
becomes non-functional, necessitating government interference
through public provisions.
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