Producers have little incentive to produce a public good because
A)the social benefit is less than the private benefit.
B)the social benefit is less than the social cost.
C)there is a free-rider problem.
D)there is a Tragedy of the Commons.

Question

Quizplus · Accepted Answer

The free-rider problem occurs when individuals can benefit from a good without paying for it, leading to underproduction of that good by producers since they cannot easily exclude non-payers.

Producers Have Little Incentive to Produce a Public Good Because