Public Goods:
Whether a good is considered public (or private for that matter) rest upon its degree of consumption (rivalarous or nonrivalrous) and the extent of its ownership (excludable or nonexcludable). Rivalrous consumption means that what one consumes cannot be consumed by another (i.e. a pair of shoes). Nonrivalrous consumption allows more than one person to derive benefits from some level of supply at the same time (i.e., national defense). Excludable ownership means that one person has control over the use of a good; a good is nonexcludable when it is impractical for one person to maintain exclusive control over its use (i.e., fish in the ocean). For the most part, any good that is not purely private is considered a public good. Finally a third characteristic related to demand, congestibility is also introduced. A good is congested if the marginal social cost of consumption exceeds the marginal private cost of consumption. The text cites a key point being “that some goods may only be nonrivalrous over some range of usage, but at some higher level of use, consumers begin to impose costs on each other.