Which of the following is not a consideration when attempting to eliminate a free rider problem or tragedy of the commons problem?
A) The social costs must be realized by the individual.
B) Something must be done to alter individuals' trade-offs.
C) Market participants must internalize the value of the externality.
D) Firms must be forced to provide the good or service at a price that is below profit maximizing price.

Question

Quizplus · Accepted Answer

Option D is not a relevant consideration to eliminate a free rider problem or tragedy of the commons problem. Option A, B, and C are all important considerations to address these problems. A free rider problem occurs when individuals benefit from a good or service without paying their fair share. To address this problem, it is essential that individuals realize the social costs of their actions. To eliminate a tragedy of the commons problem, market participants must internalize the value of the externalities they create, and something must be done to alter individuals' trade-offs. However, forcing firms to provide a good or service at a price below the profit maximizing price is not a relevant consideration as it is not always feasible for firms to do so. Furthermore, it may create additional economic distortions that could make the problem worse.

Which of the Following Is Not a Consideration When Attempting