The free-rider problem is encountered when
A)all individuals are willing to pay for what they consume.
B)someone benefits from the consumption of a good without paying his or her full share.
C)all individuals who consume a public good pay for it.
D)all goods consumed and produced are private goods.

Question

Quizplus · Accepted Answer

The free-rider problem arises when some individuals benefit from the consumption of a public good without contributing to its production or cost. This creates a situation where those who pay for the good end up subsidizing those who do not pay, leading to market failure. The other options do not accurately describe the free-rider problem.

The Free-Rider Problem Is Encountered When