The free-rider problem is a direct result of:
A)the inability to exclude nonpayers.
B)marginal-cost pricing.
C)full-cost pricing.
D)horizontally summed supply curves.

Question

Quizplus · Accepted Answer

The free-rider problem arises when individuals can benefit from a public good without paying for its provision. This is due to the inability to exclude non-payers, which is option A. Marginal-cost pricing (B) and full-cost pricing (C) are pricing strategies, which do not directly relate to the free-rider problem. Horizontally summed supply curves (D) are used to determine the overall quantity supplied in a market, but they also do not relate to the free-rider problem.

The Free-Rider Problem Is a Direct Result Of