Free markets cope best with rivalrous and excludable goods—what we
here call “private” goods. The table gives examples of goods in each of
four categories, depending on whether consumption of the good or
service is rivalrous and whether one can be excluded from consuming it.
A good or service is said to be rivalrous if one person’s consumption of
one unit of the good means that no one else can also consume that same
unit. For example, a chocolate bar is rivalrous because if you eat the
entire bar, it cannot also be eaten by your friend. In contrast, a radio
signal is not rivalrous. You and your friend can sit in your separate living
rooms and both receive the same signal, neither of you diminishing the
amount available to the other.
A good is said to be excludable if people can be prevented from
consuming it. A chocolate bar is excludable because you cannot eat it