Which types of goods may lead to market failure if the cost of using the good excludes users who would gain more from enjoying the good than they would cost society by consuming the good?

Question

Madeline May

Social Studies

8 December, 10:15

Which types of goods may lead to market failure if the cost of using the good excludes users who would gain more from enjoying the good than they would cost society by consuming the good?

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Answers (1)

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Lillianna Howell · Answer 1

Toll goods

Explanation:

When the feasibility of exclusion is relatively easy (as with a private good) but consumption of benefits is joint rather than subtractive, then the output is known as a toll good or service. Parks and game reserves are examples of toll goods or services. Access can be controlled to these areas at reasonable cost, and many of the outputs can be shared among numerous users.