When the free-rider problem exists,
A) the market will devote too few resources to the production of the good.
B) the cost of the good will always be more than the benefit of the good.
C) the good will not be produced.
D) entrepreneurs will eventually find a way to make free-riders pay their share.

Question

Quizplus · Accepted Answer

The free-rider problem occurs when individuals can benefit from a good without paying for it, leading to underproduction as the market fails to allocate enough resources to its production.

When the Free-Rider Problem Exists