Explain why the provision of bus and local rail (mass transit) services in cities is classified as a private good not a public good and consider why such services might only be provided by the private sector.
Exam No：9708_w23_qp_23 Year：2023 Question No：3(a)
Answer:
Knowledge points:
1.6.1 nature and definition of free goods and private goods (economic goods)
1.6.2 nature and definition of public goods
1.6.3 nature and definition of merit goods: under-consumption as a result of imperfect information in the market
1.6.4 nature and definition of demerit goods: over-consumption as a result of imperfect information in the market
Solution:
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