《管理经济学》研究生教学PPT课件电子讲义.ppt

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Impact of the Clean Air Act In Action 14-* Market Failure Market output Price 0 Demand Due to reduction in output by all firms Public Goods A public good is another type of good that leads to a market failure. A public good is: A good that is nonrivalous and nonexclusionary in consumption, and therefore, benefit persons other than those who buy the goods. Nonrivalous consumption: the consumption of the good by one person does not preclude other people from also consuming the good. Nonexclusionary consumption: once provided, no one can be excluded from consuming the good. 14-* Market Failure Public Goods and Inefficiencies Public goods leads the market to provide inefficient quantities since everyone gets to consume a public good once it is available, but individuals have little incentive to purchase the good; they prefer others to pay for it. When a group of individuals rely on the efforts or payments of others to provide a good, we say there is a free-rider problem. 14-* Market Failure Demand for Public a Good In Action 14-* Market Failure Quantity of streetlights Price 0 Individual demand for streetlights Individual consumer surplus = $72 Total demand for streetlights Demand for Public a Good In Action 14-* Market Failure Quantity of streetlights 0 Price Price Quantity of streetlights Total demand by B and C B’s and C’s individual demand A’s demand for streetlights A’s cons