Because of the free-rider problem,
A)private markets tend to undersupply public goods.
B)the federal government spends too many resources on national defense and not enough resources on medical research.
C)fireworks displays have become increasingly dangerous.
D)poverty has increased.

Question

Quizplus · Accepted Answer

The free-rider problem occurs when individuals benefit from a public good without contributing to its production. As a result, private markets tend to undersupply public goods because it is difficult to charge all the individuals who benefit from the good. Therefore, choice A is the correct answer. The other choices do not relate to the free-rider problem.

Because of the Free-Rider Problem