Differentiating Between Market Structures Table and Questions
Fill in the matrix and describe differences in public and private goods, common resources, and natural monopolies. Use your book and the Tomlinson video tutorials as a tool to help you answer questions about market structures.
ExampleIs there a rival in consumption?Is it excludable?
Ice cream coneYes, because if someone eats the ice cream cone another person cannot eat the same one. Yes, because we can stop someone from eating an ice cream cone. Public Good
Tornado sirenNo, because a person can use a public good and it does not limit or reduce another person from using the public good.No. because people cannot be stop from using publics goods. Common Resource
Fish in the oceanYes, because there are fewer amount of goods for the next person.No, because even though there are fewer amounts of goods for the next person there is still enough goods for other individuals. Natural Monopoly
Fire protectionNo, because the people who protect the good is still paid no matter if there is damage or not.Yes, because people who protect the good can easily let the good go to waste.
1. What is the difference between a public good and a private good? The difference between a public good and a private good is a private good there is a rival consumption and it is excludable. A public good is totally opposite from a private good. Public goods are not rival in consumption and not excludable.
2. What is a common resource? A common resource is rival in consumption but is not excludable.
3. What is a natural monopoly? A natural monopoly is when a good is excludable but not rival in consumption.