1.2 Excludability of goods

Now that we’ve built an understanding of subtractability and rivalry, lets talk about excludability. A good is excludable if you can limit it to only paying customers. Think again about the cup of coffee. If I run a coffee shop, I will only give coffee to those who pay for it. A museum is also excludable – only those who pay for a ticket can view the exhibits.

A good is non-excludable if you cannot stop people from using it. These include, for example, fish in a public pond, a lighthouse, or a public beach.
Below is a matrix that demonstrates where certain goods may fall depending on their excludability and subtractability.

Exercise

Excludability matrix.

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