12 Nov What is a private good?
A private good fulfills the characteristics of rivalry and excludability. Rivalry in consumption means that consumption of a good by an individual will reduce the availability and the amount for consumption by other individuals. Excludability in consumption means that consumption of a good can be excluded if the individual does not pay.
An example of a private good is a can of drink. If a can of drink is consumed by one, someone else is deprived of the same can of drink and will not be able to quench his thirst. This shows that the consumption of the can of drink is rival. At the same time, the can of drink is excludable. This means that consumers who do not pay for the can of drink will not be able to enjoy it. In reality, there are countless examples of private goods and services such as computers, cars, food & beverages, haircutting services and tour services.