Public goods are those goods that are
Subsidized by the government to reduce the cost to the consumer
Incorrect AnswerTo be ideally provided by the government since private enterprises may not find it economically viable
Correct AnswerProduced by the state owned enterprises in strategic interest
Incorrect AnswerConsumed by more than one individual
Incorrect AnswerExplanation:
A public good is a product that one individual can consume without reducing its availability to another individual and from which no one is excluded. For e.g. clean air, national defence, law and order, flood control system, lighthouses etc.
Even LPG is subsidized, but it is not a public good. So, (a) is incorrect.
PSEs produce steel, defence equipment and weapons too, but none of them are public goods. So, (c) is also incorrect.
Many public goods may at times be subject to excessive use resulting in negative externalities affecting all users; for example air pollution and traffic congestion. Public goods problems are often closely related to the "free-rider" problem, in which people not paying for the good may continue to access it.
These may also be called social goods as they look essential from the social justice and well-being perspective for the people. Education, healthcare, sanitation, drinking water, nutrition, caring for the handicapped and old etc., come under this category.
![]()
By: Pradeep Kumar