Items such as loaves of bread, clothing, and boxes of breakfast cereal are common examples of private goods. They are considered private because they are both rival, meaning one person's consumption prevents another's, and excludable, as access can be denied to those who do not pay for them.

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A private good is defined by two key characteristics: it is both rival and excludable. Rivalry implies that one person's consumption of a good prevents another person from consuming that same unit. Excludability means that access to the good can be restricted, typically to those who have paid for it.

Private Good

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

CORE Econ - The Economy 2.0: Microeconomics

Markets are the standard mechanism for allocating private goods. However, the efficiency of this market allocation, in terms of achieving a Pareto-efficient outcome, is contingent on the presence of sufficient competition. In markets with limited competition, the allocation is unlikely to be Pareto efficient.

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