Under what circumstances does the free-rider problem arise?
A) when the marginal benefit to a private individual outweighs the marginal cost of producing a good
B) when goods can't be provided exclusively to paying customers
C) when goods are produced by the government
D) when goods cease to be scarce

Question

Quizplus · Accepted Answer

The free-rider problem arises when goods or services can't be provided exclusively to paying customers. This means that non-paying individuals can benefit from the good or service without contributing to its production or cost. This often occurs in situations where the cost of excluding non-paying individuals is too high, such as with public goods like national defense or clean air.

Under What Circumstances Does the Free-Rider Problem Arise