Write a response to the following: Public Goods Theory describes the relationshi

Question

Write a response to the following:

Public Goods Theory describes the relationship and of the importance between, and of, diverse types of goods. There are many reasons that it is important to always consider Public Good Theory when making key decisions about public finance in America. First, and most importantly, public finance decisions that impact public goods could potentially cause detriment to many. This is especially the case with public goods and with private goods to a lesser extent. A public good is a good that is both non-excludable and non-rivalrous. In contrast, a private good is one that is both excludable and rivalrous. Many people make use or even rely on these goods. And, while sometimes not everyone contributes to their production, it is often the case that there is only a marginal cost in allowing these non-paid goods to be utilized. In any case, these goods often-but not always- have a positive impact on society. For this reason. public finance decisions need to be made with Public Goods Theory in mind.

Explanation / Answer

Above carries a very simple and rationale thought process behind determining and establishing product pricing as per public needs or demand or it’s right cost or value among the public, being a public product.

Of course, margins are important for production companies, but products good and best met to manufactured can be priced beyond consumers’ reach or society’s expectation and reach to mismatch their demand and purchase power parity at any level. If such goods are left at level of mercy for private companies and retailers to decide on what margins they should sell, then it is simply an exploitation of public, allowing or even forcing them to pay a price, beyond certain valid limits. This will be no good to any public, only end consumers paying extra than desired. Hence, an element of public good is too critical to be worked upon and implemented. Hence, public finance decisions should involve primary and secondary research to show what is good and what is not for the public, and what is the right cost to do it.

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