Economics Externalities Questions
The main difference between a private good and a public good lies in their characteristics and the way they are consumed.
A private good is a type of good that is both excludable and rivalrous in consumption. Excludability means that the owner of the good can prevent others from using or accessing it. Rivalry in consumption implies that when one person consumes the good, it reduces the amount available for others. Examples of private goods include food, clothing, and cars.
On the other hand, a public good is non-excludable and non-rivalrous in consumption. Non-excludability means that it is difficult or impossible to exclude individuals from using the good once it is provided. Non-rivalry in consumption means that one person's use of the good does not diminish its availability for others. Examples of public goods include street lighting, national defense, and public parks.
It is important to note that public goods are typically provided by the government or through collective action, as the market may not efficiently provide them due to the free-rider problem. In contrast, private goods are typically provided through market transactions.