Answer to Question #247443 in Economics for Vidhisha

Question

Use examples to illustrate the difference between private and public goods and explain why only private goods will be supplied in a free market economy.

Answer 1

Public goods are distinguished from private goods, or those that benefit only the individual, by the qualities of excludability and rivalry. Usually public goods are the ones which are provided by the nature or the government for free use by the public, for example, public parks, beaches, free public events etc.

The examples of private goods are any goods or services for sale.

Public goods are unprofitable and inefficient to produce in a private market and must be provided by the government.