When the free rider problem is present in a market:
A)what people pay often does not reflect the real value they put on a good.
B)the good will likely be overconsumed.
C)the good is rival in consumption.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

The free rider problem occurs when individuals can benefit from a good without paying for it, leading to underpayment relative to the value they place on it. This often happens with non-excludable and non-rival goods, not rival goods, and typically leads to underconsumption, not overconsumption.

When the Free Rider Problem Is Present in a Market