Public goods create a free-rider problem because
A) only people who pay for the good or service can enjoy the good or service.
B) people do not want to consume public goods.
C) the good or service is rival in nature.
D) the good or service is excludable.
E) people can enjoy the good or service no matter whether or not they pay for it.

Question

Quizplus · Accepted Answer

Public goods are non-excludable, meaning individuals cannot be excluded from consuming the good or service even if they did not contribute to its provision. This creates a free-rider problem, as individuals have an incentive to avoid paying for the good or service and still benefit from its provision.

Public Goods Create a Free-Rider Problem Because