The free-rider problem
A) occurs when people who do not pay for information take advantage of the information other people have to pay for.
B) suggests that the private sale of information will only be a partial solution to the lemons problem.
C) prevents the private market from producing enough information to eliminate all the asymmetric information that leads to adverse selection.
D) all of the above.

Question

Quizplus · Accepted Answer

The free-rider problem encompasses all the issues mentioned: people benefiting from information they haven't paid for, contributing to the lemons problem by not fully solving it through private sales, and hindering the market's ability to produce sufficient information to eliminate asymmetric information, thus preventing adverse selection.

The Free-Rider Problem