Explain why public goods must be provided by the government.
Public goods are the goods like roads, parks, police services, defence services, Railway, etc. These goods are collectively consumed by one and all people in the society. These Goods are produced and provided with welfare motive, which is the main objective of Government production.
So the public goods must be provided by the government due to following reasons –
•The benefits of public goods can be easily enjoyed by everyone.
•The consumption by one individual should not affect the consumption of another individual.
Therefore, providing public goods is responsibility of government due to non-rivalry and non-excludable reasons.