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From Wikipedia, the free encyclopedia

A private good is defined in economics as a good that exhibits these properties:

  • Exclusive - it is reasonably possible to prevent a class of consumers (e.g. those who have not paid for it) from consuming the good.
  • Rivalrous - consumptions by one consumer prevents simultaneous consumption by other consumers. Private goods satisfies an individual want while public good satisfies a collective want of the society.

A private good is the opposite of a public good, as they are almost exclusively made for profit.

An example of the private good is bread: bread eaten by a given person cannot be consumed by another (rivalry), and it is easy for a baker to refuse to trade a loaf (exclusive).

One of the most common ways of looking at goods in the economy, illustrated in the table below, is the classic division based on:

  • is there a competition involved in obtaining a given good?
  • is it possible to exclude a person from consumption of a given good?
Excludable Non-excludable
Rivalrous Private goods
food, clothing, toys, furniture, cars
Common goods (Common-pool resources)
fish, hunting game, water
Non-rivalrous Club goods
satellite television
Public goods
national defense, free-to-air television, air

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