The free rider problem causes less than optimal production of a public good.
A) True
B) False
C) Uncertain

Question

Quizplus · Accepted Answer

The free rider problem occurs when individuals benefit from a public good without contributing to its production. This leads to underinvestment in the production of public goods as individuals have no incentive to pay for something they can get for free. Therefore, the statement is true.

The Free Rider Problem Causes Less Than Optimal Production of a Public