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We consider highways to be an example of an impure private good because while it is non-excludable, it is a rival good. That is, another person's consumption (usage) of the highway affects my usage of it.

In that same sense, wouldn't a fire station also be rival, at least in theory?

For example, if a fire stations has five trucks for a locality, and 6 fires break out at separate places, why can't we consider this service as a rival service?

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One common definition of a non-rival good (see here and (A)) is a good for which the consumption of additional units involves zero marginal social costs of production. On this definition the service provided by a fire service would always be rival, because (even with plenty of capacity in terms of fire engines and staff) each visit to attend a fire involves some extra cost (eg vehicle fuel).

More loosely, a good may be said to be rival if consumption by one person prevents simultaneous consumption by others (this can also be found here), implying that a good is non-rival where that is not the case. In this looser sense, infrastructure such as highways and services such as the fire service might be held to be non-rival in circumstances where capacity is large enough that consumption by some rarely prevents or interferes with consumption by others.

For those who adopt this looser definition, the difference between a highway network and a fire service, which may lead to the former but not the latter being characterised as a rival good, relates I think to the likely level of supply or capacity. Given high levels of vehicle use with peaks at certain times (rush hours), and given the costs of road-building and other demands on land use, it isn't likely to be practicable to provide enough highways in the right places to make traffic jams a rarity. On the other hand, given that a fire at any one location is a rare event, and given normally a high degree of independence between fires at different locations, it should be possible to provide sufficient capacity in a fire service that the scenario of fewer fire engines than fires will rarely occur.

Reference

(A) Nicholson W (9th edn 2005) Microeconomic Theory: Basic principles & Extensions p 596.

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  • $\begingroup$ So you are saying that at some level of supply this stop being rival goods, but why that level may be reached for fire stations (given enough money) it is unlikely to be reached for highways? $\endgroup$ – Giskard Jun 27 '16 at 13:01
  • $\begingroup$ @denesp Let me reply in two parts. 1) There is in any case an argument that the service provided by a fire service is rival, because (however many fire engines are available) the marginal cost of responding to a fire is not zero (eg cost of vehicle fuel). 2) But the OP has evidently encountered the view that the fire service is non-rival. To try to explain why some might hold that view for the fire service but not for highways I'm offering the distinction you refer to in terms of level of supply, and consequent rarity of failure to meet demand.. $\endgroup$ – Adam Bailey Jun 27 '16 at 13:51

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