Question

Is the SF Pier 39 July 4th fireworks an example of a pure public good? Explain with a definition of pure public good. What is the source of market failure for these kinds of goods and how can the market failure be corrected?

Answer 1

Pure public good is the good which are perfectly non excludable and non rivalrous in consumption. Which means that an individual cannot be excluded from its use and same way its use by an individual will not Result in reduction of availability to others. Therefy we can say that fireworks is an example of pure public good.

Source of market faulure for these kind of goods is when the consumers decide to not to pay for these goods but still anyhow use these goods. FOR EXAMPLE national defence can be regarded as one such public goods in which public receivees equal amount of benefits regardless of the fact that how much they pay

These market failures can be corrected only either consumers decide not to use these goods as they decided or they should pay for these goods even after they have decided to not to pay for them then only these market failures can be corrected