When a good is not easily excludable,what people pay for it will:
A)not necessarily reflect the real value they place on it.
B)reflect the real value they place on it.
C)exactly equal the social benefit of the good.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

When a good is not easily excludable, it means that it is difficult to prevent people who do not pay for the good from using it. Therefore, people may benefit from the good even if they do not pay for it. This can lead to free-riding behavior, where individuals do not pay for the good but still benefit from it. As a result, what people pay for the good may not reflect the real value they place on it, since they may be willing to pay less knowing that they can still use the good without paying.

When a Good Is Not Easily Excludable,what People Pay for It