How can the free-rider problem become worse
A)if the government refuses to provide the product
B)if the number of beneficiaries is large
C)if private markets can provide the rival in consumption good
D)if the number of provisions is small

Question

Quizplus · Accepted Answer

The free-rider problem becomes worse if the number of beneficiaries is large. This is because as the number of beneficiaries increases, the cost of excluding non-payers from enjoying the benefits becomes higher and the incentive to free-ride also increases. Therefore, it becomes more difficult for the provider of the public good to keep track of who is contributing, and the burden of funding the public good may fall on a smaller group of contributors.

How Can the Free-Rider Problem Become Worse