VI) On the basis of ownership
Private goods and Public goods.
- Goods which are privately owned and consumed by people.
- Private goods satisfy private wants through voluntary exchange.
- Private goods have to be paid for.
- Private goods are provided to those who are willing to pay for them.
- Principle of exclusion is applied in case of private goods.
- Production of private goods is profit motivated.
- Benefits from the sale of private goods can be monopolised.
- Private goods refer to individual property eg building, land, vehicle etc which are possessed by an individual.
- Goods which are collectively owned and consumed people.
- Public goods satisfy social wants according to the need and convenience of consumers.
- Public goods may be low priced or free.
- Provided to all to satisfy wants which may not be satisfied by private goods.
- Principle of exclusion is not applied in case of public goods
- Price fixation of private goods is possible
- Cost [not price] fixation of public is possible
- Production of public goods is welfare motivated.
- Benefits from the sale of public goods is shared by all.
- Public goods like railways roads dams defence goods etc are owned by society. They are common to all and owned by society collectively.