Free riders are not a problem in the market for a private good because
A) non-payers can be excluded from consuming the good.
B) the good is a rival good.
C) the good can be produced only at a positive marginal cost.
D) the free rider will not get caught.

Question

Quizplus · Accepted Answer

In the market for a private good, exclusion is possible, which means that non-payers can be denied access to the good. Therefore, free riders cannot benefit from the good without paying for it. This is not the case for public goods, where exclusion is not possible and free riders are a major problem. The fact that the good is a rival good or can be produced at a positive marginal cost is not directly relevant to the issue of free riders. The option of getting caught or not is also not relevant, as the main issue is whether individuals are incentivized to pay for the good or not.

Free Riders Are Not a Problem in the Market for a Private