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Dictionary of Economics

Course (113 videos)

Private Goods

What is a private good?

A private good is any good or service that is excludable and rival.

Most goods are private goods -- your food, clothing, etc. People who don’t pay cannot consume or use them, and your use of these goods precludes others from being able to use them. If you are wearing a pair of jeans, it’s impossible for your friend to wear that same pair of jeans at the same time.

But private goods are only one type of goods. What others are there? To get started learning about other types of goods, check out Public Goods and Asteroid Defense from MRU’s Principles of Microeconomics course.

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Transcript

What is a private good? A private good is any good or service that is excludable and rival.

 

Let's look at jeans as an example of a private good. Jeans are excludable because people who don't pay can easily be prevented from using them. Jeans are also rival. One person's use of the good reduces the ability of another person to use the good. So if one person is using a pair of jeans, it's pretty difficult for another person to use the same jeans at the same time. Most goods are private goods -- think food, contact lenses, clothing, et cetera. But private goods aren't the only type of goods.

 

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