Why do public goods sum MB vertically while common resources are overused?
Everyone consumes the same public-good quantity, so willingness to pay adds; common resources are rival but hard to exclude.
Follow the cause and effect
Place the good in the rivalry-excludability matrix before choosing a model.
For a public good, sum all MB at the same G and set the sum equal to MC.
For a common resource, internalize user cost or define rights.
The model you are using
Conditions for this model
Two consumers share G, no congestion in the example, and marginal willingness to pay is truncated at zero.
The exam trap
Government provision does not make a good public, and free access does not make it nonrival.
Connect the reasoning to the graph
What changes
- Public-good demand is summed vertically, not horizontally as for private goods, because everyone consumes the same G.
What stays fixed
Two consumers share G, no congestion in the example, and marginal willingness to pay is truncated at zero.
Keep these conditions throughout the comparison; change only what the case above specifies.
What to inspect
For a common resource, internalize user cost or define rights.
Compare before and after, and locate the conclusion on the graph.
5 MINUTES · TRANSFER THE IDEA
Can you explain it without the lesson?
Classify an uncrowded versus congested park and explain how congestion changes the category.