The economic system of the state performs a number of important tasks. One of them is the production of services and goods for citizens. These public goods are useful for many people (for example, bridges, defense of the country and others). As a rule, such production is unprofitable for the private sector, and it is assumed by the state.
If the provision of benefits to the individual is impossible without giving others and consumption together, then it is called pure public. An example is the civil defense of the population, as it concerns everyone and everyone to the same extent. Thus, pure public goods are goods and services, the benefits of which are inextricably shared throughout society. Moreover, the distribution of benefits does not depend on the desire of individual citizens to acquire or not to acquire them (services and goods).
Pure public goods have two characteristics. The first - the lack of competition in consumption - indicates that with an increase in the number of consumers, the utility delivered to each of them never decreases. If pure public goods are provided to the individual consumer, then the costs are zero. With an increase in the number of consumers, the principles of Pareto improvement are fulfilled (in comparison with the previous state in the changed economic situation, no one lost and some participants in economic relations even won).
The second feature - non-exclusivity - is that the producer of public goods does not have the opportunity to remove the consumer from use. Suppliers are not able to enter into separate economic relations with each consumer.
Pure public goods are not bought in the market. They are paid for by the state tax system.
Due to the fact that the consumption of public goods is accompanied by positive effects for all citizens, the economic system should rationally solve the problems not by distribution, but by ensuring the necessary volume of their production.
Of course, the classification is not limited to the concepts of private and general consumption and their characteristics. Moreover, the applied features may have varying degrees of manifestation with respect to a particular product or service. Thus, both the private and the public good may possess indiscriminateness (or other attributes).
Goods with a high degree of selectivity and exclusivity with a low value are called shared goods. Moreover, restrictions on consumption and use are associated with high costs. As a rule, these benefits include beaches, parks, places of public visits, and therefore they are also called communal. The joint nature of their use contributes to the emergence of a high level of competition on the principle of "who came first, he uses the first."
Goods with a high level of exclusivity and a low degree of selectivity are called collective excluded (public). In this case, access to their use may be (with low costs) limited. In some situations, the level of indiscriminate benefits may decline in line with the increase in the number of consumers. Moreover, from a certain moment (from the “overload point”), provision for additional consumption is associated with an increase in certain costs - with a decrease in utility for consumers.
Those benefits, when consumed which non-competitiveness persists within a specific number of consumers, are called overloaded. So, for example, with an increase in the number of users, the congestion of the carriageway increases, and therefore the speed of movement decreases.
Demand for public goods is established in accordance with the degree of their marginal utility to consumers at each particular price level.