Summary
A private good is defined in economics as "an item that yields positive benefits to people" that is excludable, i.e. its owners can exercise private property rights, preventing those who have not paid for it from using the good or consuming its benefits; and rivalrous, i.e. consumption by one necessarily prevents that of another. A private good, as an economic resource is scarce, which can cause competition for it. The market demand curve for a private good is a horizontal summation of individual demand curves. Unlike public goods, such as clean air or national defense, private goods are less likely to have the free rider problem, in which a person benefits from a public good without contributing towards it. Assuming a private good is valued positively by everyone, the efficiency of obtaining the good is obstructed by its rivalry; that is simultaneous consumption of a rivalrous good is theoretically impossible. The feasibility of obtaining the good is made difficult by its excludability, which means that is people have to pay for it to enjoy its benefits. One of the most common ways of looking at goods in the economy is by examining the level of competition in obtaining a given good, and the possibility of excluding its consumption; one cannot, for example, prevent another from enjoying a beautiful view in a public park, or clean air. Goods#Goods classified by exclusivity and competitiveness An example of the private good is bread: bread eaten by a given person cannot be consumed by another (rivalry), and it is easy for a baker to refuse to trade a loaf (exclusive). To illustrate the horizontal summation characteristic, assume there are only two people in this economy and that: Person A will purchase: 0 loaves of bread at 4,1loafofbreadat4, 1 loaf of bread at 3, 2 loaves of bread at 2,and3loavesofbreadat2, and 3 loaves of bread at 1 Person B will purchase: 0 loaves of bread at 6,1loafofbreadat6, 1 loaf of bread at 5, 2 loaves of bread at 4,3loavesofbreadat4, 3 loaves of bread at 3, 4 loaves of bread at 2,and5loavesofbreadat2, and 5 loaves of bread at 1 As a result, a new market demand curve c
About this result
This page is automatically generated and may contain information that is not correct, complete, up-to-date, or relevant to your search query. The same applies to every other page on this website. Please make sure to verify the information with EPFL's official sources.
Related lectures (6)
Hydraulic Economy: Economic Evaluation
Explores economic evaluation in hydraulic economy, focusing on cost-benefit methods, opportunity costs, and differential analysis in engineering.
Patent Management
Explores the history, principles, elements, and costs of patents, emphasizing the importance of inventorship and the modern patent system.
Market Failures and State Interventions
Covers market failures, state interventions, public goods, externalities, and natural monopolies.
Show more
Related publications (5)

VELUXlab: a sustainable prototype of active house for innovation

Arianna Brambilla

Active House is a vision of buildings that create healthier and more comfortable lives for their occupants without impacting negatively on the climate. The concept is based on a responsive behavior of the building, capable to answer instantly to the climat ...
2013

Chiral Bronsted Acid-Catalyzed Enantioselective Three-Component Povarov Reaction

Jieping Zhu, Hua Liu

The three-component Povarov reaction of aldehydes, anilines, and benzyl N-vinylcarbamate in the presence of 0.1 equiv of chiral phosphoric acid afforded cis-2,4-disubstituted tetrahydroquinolines, e.g. I, in good yields and excellent enantiomeric excesses. ...
2009

Dendrite Tracking in Microscopic Images using Minimum Spanning Trees and Localized E-M

Pascal Fua, François Fleuret

We describe in this document our preliminary results regarding the tracking of dendrites spreading from a neuron in confocal microscope im- ages. When using a small number of image layers, we obtain good results by combining a EM-based local estimate of th ...
2006
Show more
Related concepts (5)
Common-pool resource
In economics, a common-pool resource (CPR) is a type of good consisting of a natural or human-made resource system (e.g. an irrigation system or fishing grounds), whose size or characteristics makes it costly, but not impossible, to exclude potential beneficiaries from obtaining benefits from its use. Unlike pure public goods, common pool resources face problems of congestion or overuse, because they are subtractable. A common-pool resource typically consists of a core resource (e.g.
Excludability
In economics, a good, service or resource are broadly assigned two fundamental characteristics; a degree of excludability and a degree of rivalry. Excludability is defined as the degree to which a good, service or resource can be limited to only paying customers, or conversely, the degree to which a supplier, producer or other managing body (e.g. a government) can prevent "free" consumption of a good. Excludability was originally proposed in 1954 by American economist Paul Samuelson where he formalised the concept now known as public goods, i.
Goods
In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not transferable. A good is an "economic good" if it is useful to people but scarce in relation to its demand so that human effort is required to obtain it. In contrast, free goods, such as air, are naturally in abundant supply and need no conscious effort to obtain them.
Show more