What you’ll learn to do: define and give examples of public goods and externalities
We’ve learned that free markets are socially optimal (or more specifically, allocatively efficient) because they provide the quantity of output that maximizes the social surplus. In this section, we will learn about how markets for certain products, i.e. public goods and goods with externalities, can fail to provide the socially optimal quantity of a product.
Contributors and Attributions
- Introduction to Public Goods and Externalities. Authored by: Steven Greenlaw and Lumen Learning. License: CC BY: Attribution
- highway and traffic. Authored by: MichaelGaida. Provided by: Pixabay. Located at: https://pixabay.com/en/highway-auto-traffic-road-drive-1767107/. License: Public Domain: No Known Copyright