Question

Some public goods, like street lights, are provided by the government. However radio stations are also considered public goods, yet are provided by private companies. What best explains this phenomenon?

A. People like listening to radio stations but don't care if there are street lights or not, so the government must provide them.

B. Public radio stations are excludable so they are able to charge listeners, but street lights are nonexcludable so they must be provided by the government.

C. Radio stations can be funded by private advertisers who pay to play commercials between programming. This is not a practical option for public goods like street lights.

D. The government has no way of providing radio stations due to private competition.

Answer 1

"C"

Radio stations can be funded by private advertisers who pay to play commercial between programming. This is not a practical option for the public goods like the street light.

Apart from this, radio stations are considered as public goods because it is non-rivalrous and non-excludable i.e. if one person listens to the radio the other is not excluded from it and if one person listens to the radio the other don't get less enjoyment from it (the utility they are getting is the same).