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

Question

Quizplus · Accepted Answer

Public goods are non-excludable, meaning that it is difficult, if not impossible, to exclude individuals from enjoying the benefit of the good or service once it has been provided. As a result, people can enjoy the good or service without paying for it, leading to a free-rider problem where individuals choose not to pay and still benefit from the public good.

Public Goods Create a Free-Rider Problem Because