Answer
A public good is one which is non-rivalrous in consumption and non-excludable. Examples of public goods include clean air, national defence and fireworks displays. The private market generally cannot provide public goods, because consumers cannot be excluded from using the public good even if they have not paid for it. This is the free-rider problem. Instead, governments often provide public goods because they can enforce payment through taxation.
Work Step by Step
The private market works best at providing goods which are both excludable and rival in consumption. Because public goods are non-excludable, consumers cannot be excluded from using the public good even if they have not paid for it — this is the free-rider effect.
