can produce public goods. For example, think about radio. It is nonexcludable, since once the radio signal is

broadcast, it would be very difficult to stop someone from receiving it. It is non-rival, since one person

listening to the signal does not prevent others from listening as well. Because of these features, it is practically
318 13 • Positive Externalities and Public Goods

impossible to charge listeners directly for listening to conventional radio broadcasts.

Radio has found a way to collect revenue by selling advertising, which is an indirect way of “charging” listeners

by taking up some of their time. Ultimately, consumers who purchase the goods advertised are also paying for

the radio service, since the station builds in the cost of advertising into the product cost. In a more recent

development, satellite radio companies, such as SiriusXM, charge a regular subscription fee for streaming
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