Private Good

A private good is a product or service produced by a privately owned business and purchased to increase the utility, or satisfaction, of the buyer. Most of the goods and services consumed in a market economy are private goods. The prices of these products, such as hamburgers, haircuts, and dental services, are determined to some degree by the market forces of supply and demand. Private goods are both excludable and rivalrous. Excludability means that producers can prevent people from consuming the good or service, based on the consumer's ability or willingness to pay. Rivalrous means that one person's consumption of a product reduces the amount available for consumption by another.

The absence of excludability and rivalry introduces market failures that ensure that some goods and services ...