The free rider problem:
A) can never prevent pure public goods from being supplied.
B) results because people act unselfishly.
C) results because people behave irrationally.
D) prevents voluntary cost sharing from achieving the efficient output of a public good.

Question

Quizplus · Accepted Answer

The free rider problem occurs when individuals can benefit from a public good without contributing to its cost, leading to under-provision of the good as people rely on others to pay. This prevents voluntary cost sharing from achieving the efficient output.

The Free Rider Problem