A free rider problem arrises when
A) there are very few beneficiaries and exclusion of any one of them is possible.
B) there are many beneficiaries and exclusion of any one of them is possible.
C) there are many beneficiaries and exclusion of any one of them is impossible.
D) there are very few beneficiaries and they all try to use the good simultaneously.

Question

Quizplus · Accepted Answer

A free rider problem arises when there are many beneficiaries and exclusion of any one of them is impossible. This means that once a public good is provided, everyone can benefit from it without having to pay for it. Since no one can be excluded, there is little incentive for individuals to voluntarily contribute to the provision of the public good, as they can simply free ride on the contributions of others. This can lead to under-provision of the public good.

A Free Rider Problem Arrises When