The problem with public goods is similar to the problem with positive externalities: the marginal social benefit exceeds any individual's marginal benefit.

This is because public goods are non-excludable and non-rivalrous, meaning that they cannot be easily excluded from anyone's consumption and one person's consumption does not diminish the amount available to others. Therefore, individuals may not willingly pay for the good because they can free ride on the contributions of others, leading to underproduction or undersupply of the public good. This results in the marginal social benefit being greater than any individual's marginal benefit.