Private Markets Usually Provide Lighthouses Because Ship Captains Have the Incentive

question 128

True/False

Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.

---

Definitions:

Equilibrium

A state where market supply and demand balance each other, and, as a result, prices become stable.

Social Marginal Benefit

The additional benefit to society of consuming or producing one extra unit of a good or service, including both direct and external benefits.

Public Goods

Public goods are products or services that are non-excludable and non-rivalrous, meaning they can be consumed by anyone without reducing their availability to others.

Public Good

Nonexclusive and nonrival good; the marginal cost of provision to an additional consumer is zero and people cannot be excluded from consuming it.