Free good
A free good is a term used in economics to describe a good that is not scarce. A free good is available in as great a quantity as desired with zero opportunity cost to society.
A good that is made available at zero price is not necessarily a free good. For example, a shop might give away its stock in its promotion, but producing these goods would still have required the use of scarce resources, so this would not be a free good in an economic sense.
There are three main types of free goods:
- Resources that are so abundant in nature that there is enough for everyone to have as much as they want. An example of is the air that we breathe.
- Resources that are jointly produced. Here the free good is produced as a byproduct of something more valuable. Waste products from factories and homes, such as discarded packaging, are often free goods.
- Ideas and works that are reproducible at zero cost, or almost zero cost. For example, if someone invents a new device, many people could copy this invention, with no danger of the "resource" running out. Other examples include computer programs and web pages.
Although ideas and works may be free goods (in the economic sense) once they have been produced, they do require scarce resources, such as skilled manpower, to create them in the first place. They therefore share characteristics of both free and scarce goods.