On holiday weekends thousands of people picnic in state parks.Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero.Suppose that the Wisconsin State Park Service institutes a variable fee structure.On weekdays when the picnic areas get little use,the fee is zero.On normal weekends,the fee is $5 per person.On holiday weekends,the fee is $15 per person.The fee system corrects a problem known as the

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The problem being corrected by the variable fee structure is the Tragedy of the Commons, which occurs when a shared or public resource (in this case, the picnic areas in state parks) is overused and depleted by individuals who act in their own self-interest without regard for the collective good. The fee structure aims to reduce overcrowding on high-use days by incentivizing individuals to picnic on weekdays or pay higher fees on weekends, thereby reducing the overall depletion of the public resource. The Coase theorem pertains to the ability of private parties to negotiate solutions to externalities without the need for government intervention, the free rider problem concerns individuals who benefit from a resource without contributing to it, and the public goods problem relates to the difficulty of providing and funding goods or services that are non-excludable and non-rivalrous in consumption. None of these problems are directly addressed by the variable fee structure described in the prompt.

On Holiday Weekends Thousands of People Picnic in State Parks