Why are goods supplied to begin with?
- Economic demand. Economic demand is a principle that refers to a consumer’s demand for a particular product, as well as the price they’re willing to pay for that product. While demand is highly variable due to outside factors, the basic concept is that economic demand will decrease as price increases.
- The profit motive. the intent to achieve a monetary gain in a project, transaction, or material endeavor. Profit motive can also be construed as the underlying reason why a taxpayer or company participates in business activities of any kind. Simply put, the profit motive suggests that people tend to take actions that will result in them making money (profiting).
Can all that is demanded be allow for profit? No
- What is a public good? In economics, a public good refers to a commodity or service that is made available to all members of society. Typically, these services are administered by governments and paid for collectively through taxation. Examples of public goods include law enforcement, national defense, and the rule of law. Public goods also refer to more basic goods, such as access to clean air and drinking water.
- what is a private good? A private good is a product that must be purchased to be consumed, and consumption by one individual prevents another individual from consuming it. In other words, a good is considered to be a private good if there is competition between individuals to obtain the good and if consuming the good prevents someone else from consuming it. Economists refer to private goods as rivalrous and excludable, and can be contrasted with public goods.
Categories of public goods:
What does exhaustive mean? Non-rivalrous goods are public goods that are consumed by people but whose supply is not affected by people’s consumption. In other words, when an individual or a group of individuals use a particular good, the supply left for other people to use remains unchanged. Therefore, non-rivalrous goods can be consumed over and over again without the fear of depletion of supply.
What does exclusive mean? In economics, a good, service or resource are broadly assigned two fundamental characteristics; a degree of excludability and a degree of rivalry. Excludability is defined as the degree to which a good, service or resource can be limited to only paying customers, or conversely, the degree to which a supplier, producer or other managing body (e.g. a government) can prevent "free" consumption of a good.
Social Goods
- Education
- Libraries
- Housing
- Health Care
Common-Pool Goods
- Aquifers
- Fisheries
- Forests
- Groundwater
Toll Goods
- Broadcasting Airwaves
- National Parks
- Toll Roads
- Toll Bridges
Pure Public Goods
- Clean Air
- National Defense
- Pollution Abatement
- Street Lights
For more:
- What are public goods?
- What Is a Rival Good vs. a Non-Rival Good, With Examples.
- Non-Rivalrous Goods.
- Excludability.
