The possibility that someone can reap the benefits of being a free rider occurs
A) when negative externalities exist in the market
B) only when the market is in equilibrium
C) when positive externalities exist in the market
D) only if government is willing to subsidize the market
E) only if government actually produces the good, such as a highway

Question

Quizplus · Accepted Answer

When positive externalities exist in the market, individuals can benefit from a good or service without directly contributing to its cost, embodying the free rider problem. Positive externalities occur when the consumption or production of a good causes a benefit to a third party.

The Possibility That Someone Can Reap the Benefits of Being