Public Goods:
1) Free Rider Problem:
Since the provision of a public good is nonexclusive, everyone benefits once the public good is provided. Therefore individuals have no incentive to pay as much as the good is really worth to them. A consumer is able to behave as a free rider paying nothing for a good while anticipating that others will contribute.
Free rider problem makes it hard for a private market to provide public goods efficiently. It is generally easier to organize effective efforts to collect voluntary funding when the number of people involved in paying for a project is small because each person recognizes that his or her contribution is important. But, as the number of consumers of a public good gets larger, it is more likely that many consumers will act as free riders. Public intervention may be essential to ensure the provision of a socially beneficial public good. The government therefore often produces public good itself or subsidizes the companies that produce the good.
2) Optimal Output Decision of Public Good:
It’s hard to identify true preferences for the public good because many people will pretend that they don’t need that good not to incur any production costs.
Model:
Suppose we can easily identify the preferences.
For private goods, we can derive the market demand curve by horizontally adding up the individual demand curves. For public goods, however, we need to vertically add up the individual demand curves because everyone consumes same amount of public good compared to private goods consumed at the same price. The height of every demand curve implies the marginal benefit from public good.
Point F signify the socially optimal amount of public good (Q**). But OT is not the unit price of this public good in a market. OT means the marginal cost to produce Q** units to the market. At Q** units, we can charge OR and OS for A and B, respectively.
For private good, MBA = MBB = MC ........(i)
For public good ∑ MBi = MC .......(ii)
Latest technology based Microeconomics Online Tutoring Assistance
Tutors, at the www.tutorsglobe.com, take pledge to provide full satisfaction and assurance in Microeconomics help via online tutoring. Students are getting 100% satisfaction by online tutors across the globe. Here you can get homework help for Microeconomics, project ideas and tutorials. We provide email based Microeconomics help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Microeconomics. Through Online Tutoring, you would be able to complete your homework or assignments at your home. Tutors at the TutorsGlobe are committed to provide the best quality online tutoring assistance for Microeconomics Homework help and assignment help services. They use their experience, as they have solved thousands of the Microeconomics assignments, which may help you to solve your complex issues of Microeconomics. TutorsGlobe assure for the best quality compliance to your homework. Compromise with quality is not in our dictionary. If we feel that we are not able to provide the homework help as per the deadline or given instruction by the student, we refund the money of the student without any delay.
www.tutorsglobe.com offers The Unified Approach homework help, assignment help, case study, writing homework help, online tutoring assistance by computer science tutors.
tutorsglobe.com bio-piracy assignment help-homework help by online crop diseases and their control tutors
www.tutorsglobe.com offers computational procedure of big – m method, charne’s penalty method assignment help, homework help and online tutoring by live operation research tutors
tutorsglobe.com taenia solium assignment help-homework help by online medical parasitology tutors
Theory and lecture notes of Nominal Vs Real Exchange Rates all along with the key concepts of nominal vs real exchange rates, nominal exchange rate, real exchange rates, Domestic exporters, Domestic manufacturers and Computing exchange rates. Tutorsglobe offers homework help, assignment help and tutor’s assistance on nominal vs real exchange rates.
tutorsglobe.com diabetes mellitus assignment help-homework help by online excretion tutors
to learn the two inputs of the arithmetic circuits of half adder, full adder and flip flops using ics.
to begin the armature winding, the armature is mounted on the winding stand, then the shaft, armature core and slots are insulated according to the insulation scheme that taken from the data.
Manufacture of Sulphuric acid and Sulphates tutorial all along with the key concepts of Manufacture of Sulphuric Acid, Contact Process, Manufacture of Sulphates
Theory and lecture notes of Consumer Preference Theory all along with the key concepts of Assumptions about the consumer preferences, Cardinal vs. Ordinal Utility, Utility Surface, Diminishing MU, Properties of Indifference Curves. Tutorsglobe offers homework help, assignment help and tutor’s assistance on Consumer Preference Theory.
www.tutorsglobe.com assignment help tutorials, for various scientific method in operations research and role of computers in or. the scientific method in or study usually includes three phases.
radioactivity and the nuclear atom tutorial all along with the key concepts of nuclear model of the atom, nuclear binding energy, nuclear forces, types of radiation, radioactive decay, nuclear stability, nuclear fission and fusion
Polyurethanes, Cellulose-Polyacrylonitrile tutorial all along with the key concepts of Polyurethanes, Spandex, Cellulose, Polyacrylonitrile, Polymers an Application
Classification and Distribution of Insects tutorial all along with the key concepts of Elements of Classification, General Classification of Insects, Class Insecta, Subclass Apterygota and Sub Class Pterygota
tutorsglobe.com super conductors assignment help-homework help by online solid state chemistry tutors
1940492
Questions Asked
3689
Tutors
1481945
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!