A common solution to the free-rider problem is Choose one or more: A. for government to provide the good and then pay for its production through taxation. B. for government to subsidize consumption of the good. C. to use the Coase theorem to determine who has the property rights to the good in question. D. for government to provide vouchers to consumers of the good.

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Business

Mallory Ritter

18 July, 15:30

A common solution to the free-rider problem is Choose one or more: A. for government to provide the good and then pay for its production through taxation. B. for government to subsidize consumption of the good. C. to use the Coase theorem to determine who has the property rights to the good in question. D. for government to provide vouchers to consumers of the good.

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Cooper Jefferson · Answer 1

A. for government to provide the good and then pay for its production through taxation.

Explanation:

Free Riding is an economic problem implying usage of 'non excludable' good, by people not contributing to pay for it.

Example : Roads, Bridges etc.

One most suitable solution to free rider problem is : Providing it through government and treating all prospective beneficiaries as unified consumers set, dividing the entire total cost equally between all of them - through mechanism of taxation