Private Goods, Public Goods and Merit Goods:

Goods usually available in the market are private goods. They share the property that a portion of a good consumed by me is not available to anybody else. My consumption out of a plate having a good will reduce consumption of my sister while my viewing see a programme in TV will not compromise her consumption (viewing) of the same. Consumption of a former item is rival among consumers but that of the other item is non-rival. Similarly, it will be easy for me to exclude her from consumption of hamburger but it will not be easy for me to block the show of a programme for her while I keep viewing it (unless I lock her up in another room!). In a very trivial context, hamburger is a private good while a TV show is a public good.

Public goods therefore share the twin characteristics of non-rivalness in simultaneous consumption by two or more consumers and non-excludability of any consumer for any reason. Some will point out that excludability is a matter of cost (Note, locking up the sister or switching off TV are costs) or non-excludability may be a costly proposition; it is better to use those resources in higher provision than to block consumption.

Merit goods largely share the characteristics of private goods, which may have quite extensive positive externalities. State as a  benefactor may like to encourage, rather patronize, the consumption of such goods primarily in the interest of the consumer.

Case in example may be vaccination. There may be goods like tobacco products, which are considered as merit bads or demerit goods, and their consumption is discouraged by the State. Here the State is seen to interfere with consumer's sovereignty.