Some environmental regulations (like forbidding the burning of coal in cities) benefit each and every one of us because the air we all breathe is cleaner. If a company ignores the regulation and burns coal, while others obey the regulation, then the company
A) violates our right to a livable environment.
B) is being a free-rider.
C) benefits from externalities.
D) creates an internality.

Question

Quizplus · Accepted Answer

The company is benefiting from a "free ride" by not bearing the cost of complying with the environmental regulation while still benefiting from the cleaner air resulting from others' compliance. This behavior is known as a free-rider problem.

Some Environmental Regulations (Like Forbidding the Burning of Coal in Cities)