What Can Interest Groups Do to Minimize the Free-Rider Problem

question 87

Multiple Choice

What can interest groups do to minimize the free-rider problem?

• A) Make sure that laws only benefit their contributors
• B) Provide incentives to members, such as newsletters
• C) Kick free-riders out of the group
• D) Use intimidation to get people to join the group

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Definitions:

Sales Commissions

Fees paid to sales employees as a reward for making sales, usually a percentage of the sales amount.

Selling Expenses

Costs incurred directly from the selling of products or services, including advertising, sales commissions, and store maintenance.

Variable Costs

Variable costs are expenses that change in proportion with the level of output or activity in a business.

Fixed Selling Expenses

Costs that do not fluctuate with sales volume, such as salaries of sales staff and advertising expenses.