Public & Private Goods

• private good


  where consumption by one person makes the good unavailable for consumption by others, e.g. food
• public good

  a good or service that may be consumed by more than one person at a time e.g. internet
• characteristics of a public good

  • non-excludable: a consumer cannot be stopped from benefitting
  • non-rivalry: there is no competition between consumers
  • non-rejectable: consumers cannot opt out
• the free rider problem

  people are benefitting form goods and services that they are not paying for