The free-rider problem arises
A) when people feel their contribution is so small relative to the total amount needed that it won't make a difference whether they contribute or not.
B) when people realize they will still receive the benefits of a good whether they pay for it or not.
C) whenever the government produces a good or service.
D) whenever there is a surplus of the product in the market.

Question

Quizplus · Accepted Answer

The free-rider problem occurs when individuals can benefit from a good without contributing to its cost, leading to under-provision of that good.

The Free-Rider Problem Arises