When what people pay does not necessarily reflect the real value they put on a good,it is likely that:
A)the free rider problem exists.
B)the good will be undersupplied.
C)the good is not easily excludable.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

When people's willingness to pay for a good does not reflect its true value, it suggests that there is a market failure. This can lead to the free rider problem, where people benefit from a good without paying for it, undersupply of the good, and difficulties in excluding people from consuming the good. Therefore, all three statements are true.

When What People Pay Does Not Necessarily Reflect the Real