When people cannot be excluded from consuming a good,even if they have not paid for the good,competitive markets would
A) produce more of the good than society needs.
B) allocate more resources than the efficient amount to the production of the good.
C) produce the good so that people could enjoy a "free ride."
D) produce less than the efficient quantity.
E) eliminate the deadweight loss.

Question

Quizplus · Accepted Answer

When people cannot be excluded from consuming a good, even if they have not paid for it, this creates a "free-rider" problem. Competitive markets tend to underproduce such goods because they cannot easily capture payment from all who benefit, leading to production of less than the efficient quantity.

When People Cannot Be Excluded from Consuming a Good,even If