c) Public goods

b) types of market failure: externalities, under-provision of public goods, information gaps

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

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

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

under-provision of public goods → caused by the lack of profit obtained from its production