Question

Explain how a free rider may arise on a public good and describe the consequences of the free-rider problem.

Answer 1

Production of public goods is hard for private corporations. If a good or service is not excludable like national defense excluding citizens from using the good or service is unlikely or quite expensive. When individuals make decisions about buying a public good, there can be a free-rider problem—people have an incentive to let others pay for the public good and then "free ride" on others' purchases.
The easiest way to pay for public goods is to find a way to make sure everyone pays, while stopping free riders from doing so. For instance , if people come together through the democratic process and decide to pay taxes and take group decisions about the amount of public goods

Neighbors, for example, often form an association to run beautification projects or patrol their neighborhood after dark to deter crime. In low-income countries, where social pressure strongly encourages all farmers to participate, a region's farmers can come together to work on a large irrigation project that will benefit all.
Many charitable activities, including raising funds for local causes and for the endowments of colleges and universities, can also be interpreted as an attempt to use social pressure to prevent free riding and produce a result that will yield a public gain.

The problem of free riders is a problem in economics. It's viewed as an example of a business failure. That is, when certain people are able to consume more than their fair share of the shared resource or pay less than their fair share of the costs, it is an unfair distribution of products or services that happens.

Free riding prohibits products and services from being generated and purchased using traditional free-market methods. There is little motivation for the free rider to contribute to a common resource, because even if they don't, they can reap the benefits. As a result the resource user can not be properly paid.