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Private Goods vs Public Goods

Public goods cannot or do not exclude non-paying users and your consumption does not reduce others' consumption.

Glossary:

  • private goods (demand for)
    The demand curve for private goods is a horizontal summation of individual demands because consumption of private goods is subject to rivalry.
    diagram
  • private goods
    Goods that are subject to consumption rivalry but can easily exclude non-payers.
    diagram
  • public goods
    Goods that are not subject to consumption rivalry but cannot easily exclude non-payers either by design or due to technical difficulty.
    diagram
  • public goods (demand for)
    The demand curve for public goods represents a vertical summation of individual demands because consumption of public goods is not subject to rivalry.
    diagram

Topics:

Type of goods

Keywords

consumption rivalry, excludability, private goods, public goods