alleryStart learning →The free rider problem arises specifically from which property of a public good?
AIt is expensive to make
BIt is rival in use
CIt is privately owned
DIt is nonexcludable
Answer & Solution
Correct answer: D. It is nonexcludable
1. The two defining properties cause different problems.
2. Public goods have two defining characteristics: they are nonexcludable and non-rival.
3. Nonexcludable means a supplier cannot keep non-payers from consuming it.
4. Private companies find it difficult to produce public goods for exactly that reason.
5. Non-rivalry means the good is not used up, which is a benefit rather than a problem.
_Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 13 'Positive Externalities and Public Goods', sections 13.1-13.4_
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