An economic good is an item that is useful and scarce. It can be either physical or intangible. A physical good is something that you can touch, like a pencil or a book. An intangible good is something that you cannot touch, like a service or a song. There are four main types of economic goods: private goods, public goods, natural monopolies, and club goods.
A private good is an item that is owned by an individual and which cannot be consumed by anyone else without diminishing the owner’s supply. Private goods are typically rivalrous, meaning that one person’s consumption of the good prevents others from consuming it as well. Examples of private goods include food, clothing, and cars.
A public good is an item that is not owned by any particular individual but which can be consumed by anyone without diminishing the supply available for others to consume. Public goods are typically non-rivalrous, meaning that one person’s consumption of the good does not prevent others from consuming it as well. Examples of public goods include air pollution and national defense.
A natural monopoly occurs when there is only one supplier of a certain good or service in a given market and where it would be economically inefficient to have more than one supplier due to the high costs associated with duplicating the necessary infrastructure. Natural monopolies often arise in industries where there are significant economies of scale involved in production, such as utilities companies providing electricity or water services to customers over large geographical areas.
Club Goods are items whose consumption is restricted to members of a particular group or “club” who have paid a fee for access to them. Club Goods are usually excludable (meaning that non-members cannot consume them) but not necessarily rivalrous (meaning that one member’s consumption does not diminish another member’s ability to consume). An example of a club good would be cable TV services which require viewers to pay monthly fees in order to watch channels which are not freely available on regular television sets