00:01
So i think the easiest way to address this question is to try to provide examples that show why this is false, right? so we know that non -rival and non -excludable are like what we consider a public good, right? that there's not really strong incentives for the market to provide them, but that doesn't mean quantity is going to be zero.
00:19
It means that quantity is going to be much too low, but it doesn't mean that quantity is going to be zero.
00:26
And so imagine we have a society, right, that looks something like this.
00:32
We have one rich person and we have a thousand poor people, right? so if i draw those demand curves, right, i'm going to draw the rich person's demand curve for some public and for some public good.
00:53
So the rich person's demand curve looks something like this.
00:56
And then the social demand curve, which is the sum of all the demand curves, right, looks something like this, right? those, the poor people have much lower willingness is to pay.
01:08
And then the cost of the public good is here...