What is the difference between public goods and externalities?

Public goods are non-excludable and non-rival - i.e. you cannot be stopped from consuming the good and this does not affect others' consumption
Externalities are benefits/costs to a third party outside the market transaction
A public good such as knowledge could have positive externalities, but they are not the same thing

NS
Answered by Nicholas S. Economics tutor

2775 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What are the disadvantages and advantages of economic growth?


What is the difference between a merit good and a public good?


What is the effect of reducing interest rates on a currency’s exchange rate?


Explain two ways in which central banks use monetary policy to influence the economy.


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning