Describe the concept of public goods.

Describe the concept of public goods.

Public goods are goods or services that are non-excludable and non-rivalrous in nature. Non-excludability means that once the good or service is provided, it is impossible to prevent anyone from benefiting from it, regardless of whether they have paid for it or not. Non-rivalry means that the consumption of the good or service by one individual does not reduce its availability or utility for others.

Public goods are typically provided by the government or public sector as they are not efficiently provided by the private market due to the free-rider problem. The free-rider problem arises because individuals have an incentive to not pay for the good or service since they can still benefit from it without contributing. Examples of public goods include national defense, street lighting, public parks, and clean air.