Private good
A private good is a good that a consumer has to pay to use and that consumer who do not pay for it can be prevented from using it (it is excludable). The quantity of a private good diminishes as more and more consumers use the good (it is rivalrous). [1]
When a consumer goes to a gas station and fills up their vehicle with gasoline. The person that comes after cannot consume the same gasoline used previously as it gets burned so nobody else can use it. Additionally, the gas station can prevent consumers from using their gasoline by charging a fee, until the consumer pays the price, they are excluded from using the gasoline.[2]
This differs from a public good in that, a person can neither be excluded nor can they diminish the amount of a good available to others.[3] Solar power is an example of a public good, anyone can collect the sunlight and turn it into electricity and there is an unlimited amount of sunlight which is essentially the same around the world.[4]
See Also
Read about these other types of goods to see why a private good differs from other goods:
Excludable Non-Excludable Rival Private good Common resource Non-Rival Club good Public good
References
- ↑ J.Black, N. Hashimzade, and G. Myles. (2009) "Private Good." [Online], Available: http://www.oxfordreference.com/view/10.1093/acref/9780199237043.001.0001/acref-9780199237043-e-2445?rskey=VC0wqb&result=1, 2009 [Aug 24, 2016]
- ↑ A. Goolsbee, S. Levitt and C. Syverson. Microeconomics. New York: Worth Publishers, 2013, pp. 672.
- ↑ M. Parkin and R. Bade. Economics: Canada in the Global Environment. Toronto: Pearson, 2013, pp. 392.
- ↑ Verbruggen, A., W. Moomaw, J. Nyboer, 2011: Annex I: Glossary, Acronyms, Chemical Symbols and Prefixes. In IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation [O. Edenhofer, R. Pichs- Madruga, Y. Sokona, K. Seyboth, P. Matschoss, S. Kadner, T. Zwickel, P. Eickemeier, G. Hansen, S. Schlömer, C. von Stechow (eds)], Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.