a) Free rider problem

a) distinction between public and private goods using the concepts of non-rivalry and non-excludability

b) why public goods may not be provided by the private sector: the free rider problem

non-excludable = when a good is difficult to prevent non-payers from consuming

non-rivalrous = when one person’s consumption of a good does not prevent another’s consumption

public good = a non-excludable and non-rivalrous good

private good = an excludable and rivalrous good

private goods can produce profit for firms

excludable → consumers must pay to consume
rivalrous → consumers are more incentivised to consume to access the limited supply

public goods do not produce profit for firms → the free rider problem