Goods that are excludable but not rivalrous are sometimes called club
goods. Many of the obvious examples of these—such as art galleries,
roads, and bridges—are typically provided by government. The non-
rivalry for these goods means that the marginal cost of providing the good
to one extra person is zero. As an example, ask yourself what it costs for
an extra person to walk through the Canadian Museum of History in
Gatineau, given that it is already open but not many people are there. Or
what is the cost of having one more person drive on an uncrowded road?
The answer in both cases is zero. But if the marginal cost to society of
providing one more unit of the good is zero, then allocative efficiency
requires that the price also be zero. Any positive price would prevent
some people from using it, but this would be inefficient. As long as their
marginal benefit exceeds the social marginal cost of providing the good
(zero in this case), it is efficient for these people to use the good.
For this reason, art galleries, museums, libraries, roads, bridges, and
national parks are often provided by various levels of government. In
some cases, like libraries and roads, the price to consumers is usually
zero. In others, like national parks and art galleries, governments are
often led to charge a price to help cover some of the operating costs (even
though the marginal cost of use is very close to zero).
To avoid inefficient exclusion, the government often provides goods that are non-rivalrous but
excludable.The positive price in some of these cases can be explained by another
feature of club goods. What happens in the Canadian Museum of History