What is a public good?

A public good is defined as a good that is non-excludable and non-rivalrous. Being non-excludable means that it is not possible to prevent individuals from accessing or using the good once it is provided, leading to shared consumption. Non-rivalrous implies that one person's use of the good does not diminish its availability for others; multiple individuals can simultaneously benefit from it without affecting one another’s consumption.

Examples of public goods include clean air, national defense, and street lighting. These goods are typically provided by the government or through collective action, as private market provision is often inadequate due to the free-rider problem, where individuals can benefit without contributing to the cost.

In contrast, the other options describe characteristics that do not align with the definition of public goods. Goods that are excludable and rivalrous describe private goods, which can be limited to those who pay for them. Private benefits or production solely by private firms highlight the differences between public and private goods further, illustrating the unique nature of public goods in an economic context.