What defines a good or service as a private good?

A private good is defined by its characteristics of exclusivity and rivalry in consumption. When one individual consumes a private good, it reduces the availability of that good for others, which is the essence of rival consumption.

This means that private goods are subject to individual ownership; when one person buys or consumes such a good, others cannot simultaneously use or consume the same quantity of that good. This concept highlights how private goods are generally produced and sold by private entities for profit, and ownership rights are clearly defined.

In contrast, options that emphasize shared consumption and universality, such as free access for everyone, refer to public goods, which are non-rivalrous and non-exclusive. These goods can be consumed by multiple individuals simultaneously without diminishing the amount available to others. Therefore, understanding the unique nature of private goods as those that entail individual consumption and reduced availability for others clarifies why the answer centers around exclusive consumption by one individual at a time.