The free- rider problem is the inability of private markets to achieve the efficient level of production of
A) private goods.
B) rival goods.
C) excludable goods.
D) public goods.

Question

Quizplus · Accepted Answer

The free-rider problem occurs with public goods because they are non-excludable and non-rivalrous, meaning people cannot be easily excluded from using them and one person's use does not reduce availability for others. This leads to underproduction of these goods in private markets, as individuals may not pay for something they can benefit from for free.

The Free- Rider Problem Is the Inability of Private Markets