A free- rider problem exists if
A) a firm can obtain technology at a fair price.
B) those consuming the good pay nothing for it.
C) two consumers can jointly consume a good, which lowers the price per person.
D) those consuming the good pay more than the cost of providing the good so that the producer's profits increase ("free ride") as a result of the overpayment.

Question

Quizplus · Accepted Answer

The free-rider problem occurs when individuals consume a good without paying for it, benefiting from the good's provision without contributing to its costs. This is common in public goods, where it's difficult to exclude non-payers from consumption.

A Free- Rider Problem Exists If