What characterizes private goods?

Private goods are characterized by being produced by private producers with the intention of making a profit. These goods are typically excludable and rivalrous, meaning that individuals can be prevented from using them if they do not pay for them, and one person's consumption of the good diminishes the ability of another person to consume it.

For example, when a company manufactures a smartphone, the company will sell it to consumers, who then own the smartphone and can use it exclusively. This profit-driven approach encourages innovation and efficiency among suppliers in a competitive market.

In contrast, goods that are consumed collectively by multiple individuals, such as public parks, do not fall under the classification of private goods. Similarly, goods produced publicly for the welfare of all, like infrastructure or public education, highlight the role of government in providing services rather than profit. Lastly, items that are solely regulated by the government may pertain to public goods or regulated markets but do not embody the essence of private goods that focus on private production for profit.