Excludable Non-excludable
Rivalrous Normal goods Common property
Apples Fisheries
Dresses Common land
TV sets Wildlife
Computers Air
A seat on an aeroplane Streams
Museums Police
500
350 Value of total catch
Number of Boats
Figure 18.2 A Public Good
MC
p2
Price
p1
Dm
Db
p0
Da
Quantity q0
Figure 18.3 Private and Social Cost
MCs
D Marginal
external
cost
MCp
p1
Price, cost
p0 Market price
Full
Marginal
marginal
private
social
cost
cost
q* q0
Production
Figure 18.4 Pollution Abatement
Firm A
Firm B
Cost per tonne eliminated [£]
100
80
50
0 60 90 120
Tonnes of pollution eliminated
Firm A Figure 18.5 Tradable Pollution Abatement
Firm B
120
Cost per tonne eliminated [£]
80
50
0 30 60 90 120
D1 MC
ATC
p2
Price
c1
p1
0 q1 q1
Output
D2 MC
p1 ATC
Price
c1
p2
0 Output q1 q2