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Common goods, public goods, private goods, natural monopolie

Identify similarities and differences between common goods, public goods, private goods, and natural monopolies. Provide an example of each type of good and justify your answers. Discuss possible positive or negative externalities associated with each example. How do the externalities affect the economy?

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The response addresses the queries posted in 875 words with references.

//Prior to discuss the similarities and differences between various kinds of goods and monopolies, it is better to understand what these goods are. The brief knowledge of these goods will be very helpful for the reader to compare and contrast various aspects of these goods. The comparison of these goods is also supported with effective examples and justifications.//

Common Goods refers to the goods which are for the welfare of the society. In the economic terms, we can say that common goods refer to the goods which are rivalrous and non- excludable. Often the problem with the common goods is overuse, it is known as tragedy of the commons-like overuse of water, fishing. Examples of the common goods are water, hunting, fishing etc. No-one is excluded from fish stocks in international waters (it is the non-excludable property) but as the people start fishing, there will be less fish stock available for the later fisherman (it is the rivalrous effect of common goods).

Public goods are non-rivalrous and non-excludable. It means that non-payers can also enjoy the benefits of the goods or services. For example education, research and development, public health and welfare, national defense, court system etc. Non -excludable and non-rivalry aspects of the public goods can be understood through the following explanation:-

For instance, people can watch a firework show organized by an entrepreneur through their windows ...

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