The free-rider problem
A)forces the supply of a public good to exceed its demand.
B)allows more people to pay for the public good than if it were a private good.
C)explains why many local governments supply public goods.
D)is reflected in the above-market price of a public good in comparison to a private good.

Question

Quizplus · Accepted Answer

The free-rider problem occurs when individuals can benefit from a public good without contributing to its cost, leading to under-provision by the market. This is why local governments often supply public goods, as they can fund them through taxation.

The Free-Rider Problem