A free-rider problem exists if
A) 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.
B) those consuming the good pay nothing for it.
C) two consumers can jointly consume a good, which lowers the price per person.
D) a firm can obtain technology at a fair price.

Question

Quizplus · Accepted Answer

The free-rider problem occurs when individuals can consume a good without paying for it, leading to under-provision of that good because producers cannot easily exclude non-payers.

A Free-Rider Problem Exists If