How do public goods differ from private goods?

Public goods are characterized by their non-excludable and non-rivalrous nature. This means that once a public good is provided, it is available for consumption by all individuals, and one individual's consumption does not diminish the quantity available for others. A classic example of a public good is national defense; everyone benefits from protection, and one person's safety does not reduce the safety available to others.

In contrast, private goods are excludable and rivalrous. When a private good is consumed, it reduces the availability of that good for others, and access can be restricted, leading to the characteristic that they are only available to those who can pay for them. Hence, the correct answer highlights the defining features of public goods compared to private goods.