The Free-Rider Problem Occurs Because

question 73

Multiple Choice

The free-rider problem occurs because

• A)people who pay for information use it freely.
• B)people who do not pay for information use it.
• C)information can never be sold at any price.
• D)it is never profitable to produce information.

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Definitions:

Economies of Scale

The cost advantage achieved by an increase in production, leading to a reduction in the per unit cost.

Capital Facilities

Assets such as buildings, utilities, and major machinery which are essential for the production process in an organization or for providing services.

Laissez-faire Perspective

An economic philosophy advocating for minimal government intervention in the market, allowing individuals to act according to their own self-interests.

Monopoly Power

The exclusive control by one company over an entire industry or sector, allowing the company to manipulate market prices and conditions.