When a good is nonexcludable:
A)consumers will pay the producers the market price for the good.
B)producers will produce too much of the good.
C)a free-rider problem will exist.
D)production will be efficient.

Question

Quizplus · Accepted Answer

When a good is nonexcludable, it means that it is difficult or impossible to exclude people from accessing it. This creates a free-rider problem where people can benefit from the good without paying for it. As a result, producers may not be able to generate enough revenue from sales to cover the cost of production, and may produce less of the good than is socially optimal. As such, a free-rider problem will exist.

When a Good Is Nonexcludable