What defines a public good?

A public good is defined by two key characteristics: it is non-rivalrous and non-excludable. Non-rivalrous means that one person's consumption of the good does not diminish the ability of another person to consume it. For example, if one person enjoys a firework display, it does not prevent others from enjoying it as well. Non-excludable means that individuals cannot be effectively excluded from using the good; once it is provided, it is available for all to use regardless of whether they have paid for it or not.

This concept helps illustrate why public goods often lead to market failures if left to the private sector. Because individuals might not have an incentive to pay for a good that they cannot be excluded from using, public goods are often funded through taxation or provided directly by the government for the benefit of all, such as public parks or national defense.

The characteristics of other responses do not align with the definition of a public good. For instance, excludable and rivalrous goods allow for control over usage and diminish in availability with consumption, while rivalrous goods can lead to scarcity and market competition. The notion that public goods are produced only by the government overlooks the possibility that private entities could also provide non-excludable and non