What is a 'Rival Good'

A rival good is a type of good that may only be possessed or consumed by a single user. Using a rival good prevents its use by other possible users. Rival goods can be durable, where users may use them one at a time, or nondurable, where consumption destroys the good, allowing only one user to enjoy it.

BREAKING DOWN 'Rival Good'

Because these types of goods can only be used or occupied by one person, competition is created for their consumption. Consumers become rivals in an attempt to obtain these goods. For example, a skateboard represents a durable good because other consumers may use it after the current rider is finished. A nondurable good, such as a cup of coffee, will perish after consumption. Only one consumer will drink the coffee, and after it is gone, there will be nothing left for another consumer to use.

Non-rival goods are the opposite of rival goods. These goods allow consumption or possession to multiple users. National parks, roads and the Internet are examples of non-rival goods.

What Rival Goods Mean for Sales and Pricing

The competitive nature of rival goods can increase their value to the individuals who seek them. This is especially true for the travel, hospitality and entertainment industries. Rival goods can include seats on an airplane or for a Broadway performance. Likewise they can include a reserved seat at a restaurant. The higher the demand is for rival goods can allow a business to exert more pricing power. The limits on the availability coupled with demand means businesses that offer such rival goods have the leeway to set prices higher.

Apparel is also rival good since only one person might wear a specific article of clothing at a time. Competition for this type of rival good is compounded by the availability of apparel in sizes that meet each consumer’s needs. Manufacturers might only produce limited quantities of products for certain sizes. That means consumers who require hard to find sizes must compete with each other procure the items they need.

Demand for rival goods can drive concentrated retail sales at holiday times as consumers race to procure items as gifts before they sell out, or while certain discounts are available. This type of shopping behavior has been used to retailers’ advantage in particular during Black Friday sales events that play into the nature of rival goods. For example, if a rival good is in high demand but has limited availability, retailers might advertise plans to offer it for sale specifically on Black Friday.

RELATED TERMS
  1. Consumer Goods

    Products that are purchased for consumption by the average consumer. ...
  2. Private Good

    A product that must be purchased in order to be consumed, and ...
  3. Capital Goods

    1. Any tangible assets that an organization uses to produce goods ...
  4. Intermediate Good

    An intermediate good is a good or service used in the eventual ...
  5. Public Good

    A product that one individual can consume without reducing its ...
  6. Pricing Power

    Pricing power refers to how much a change in price by a company ...
Related Articles
  1. Insights

    Do Deflationary Shocks Help Or Hurt The Economy?

    Find out how deflationary shocks can both benefit and hurt consumers and businesses.
  2. Insights

    The Consumer Price Index

    Find out how this economic measure can help you make key financial decisions.
  3. Investing

    Consumer Confidence: A Killer Statistic

    The consumer confidence is key to any market economy, so investors need to learn how to analyze them.
  4. Insights

    The Basics Of Tariffs And Trade Barriers

    Everything you need to know about trade barriers and tariffs and their effects on the local economy.
  5. Taxes

    How an Internet Sales Tax Will Affect Your Small Business

    Learn about how the Marketplace Fairness Act may impact small business owners should it pass in the House and what the act requires from business owners.
RELATED FAQS
  1. How are industrial goods different from consumer goods?

    Understand the difference between industrial goods and consumer goods, and learn the different types of industrial goods ... Read Answer >>
  2. Which economic factors most affect the demand for consumer goods?

    Understand how key economic factors such as inflation, unemployment, interest rates and consumer confidence affect the level ... Read Answer >>
  3. What are some examples of inelastic goods and services that are not affected by the ...

    Find out how the laws of supply and demand function for goods and services considered highly inelastic, including goods not ... Read Answer >>
  4. How does revolving credit differ from a general line of credit?

    Examine the consumer goods sector, which accounts for nearly one-third of consumer spending, and learn which goods account ... Read Answer >>
  5. What's the difference between a commodity and a product?

    Understand the difference between commodities and products, and learn how they are connected to each other and to market ... Read Answer >>
Hot Definitions
  1. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
  2. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
  3. Limit Order

    An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.
  4. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
  5. Return on Investment (ROI)

    Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency ...
  6. Interest Coverage Ratio

    The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a company can pay interest ...
Trading Center