Private goods: Most goods and services fall into this category and are both rival and excludable. Private businesses produce these goods for the market.

Natural monopoly: Goods that are non-rival but excludable tend to be natural monopolies. These firms have an ATC that is strictly downward sloping. These firms can continually increase output while reducing the average per-unit cost of production. Electricity service is an example of a natural monopoly. The most expensive part of providing a home with electricity is stringing the wires all over town. As a result the average cost of providing more kilowatt hours of electricity tends to decrease with more output. Governments often regulate natural monopolies and impose fair return price ceilings to reduce deadweight loss.

Common resource: A common resource is a good that is rival, but non-excludable. Fish in the ocean would be a common resource. Consuming a fish from the ocean means there is one less for someone else and it would be difficult if not impossible to prevent people from taking fish out of the ocean. Common resources suffer from the free rider problem as people tend to consume the common resource without paying the full cost. Common resources will be over consumed as a result. Governments often attempt to regulate the use of common resources in an effort to ensure the allocatively efficient quantity is produced and consumed.

Public goods: are both non-rival and non-excludable. A hiking trail in a public park is non-excludable and one person hiking the trail doesn’t significantly reduce someone else’s ability to hike on the trail. Public goods suffer from the free-rider problem as well. Since the good is non-excludable, consumers can use the good without paying their fair share. If left to the free market, public goods will be under produced. As a result, governments will often produce public goods.