Question

In: Economics

In the presence of free riders, the equilibrium allocation of any good will be: Select one:...

In the presence of free riders, the equilibrium allocation of any good will be:

Select one:

a. zero

b. less than optimal.

c. optimal

d. more than optimal.

Solutions

Expert Solution

Answer-In the presence of free riders, the equilibrium allocation of any good will be-

The correct answer is option B, Less than optimal, which means In the presence of free riders, the equilibrium allocation of any good will not be at the best possible level.

Option A is an incorrect answer because, In the presence of free riders, the equilibrium allocation of any good will not be the zero because it will be less than its best possible level.

Option C is an incorrect answer because, In the presence of free riders, the equilibrium allocation of any good will not be optimal which means it will not be at the best level.

Option D is an incorrect answer because it will not be more than the optimal level in presence of free riders ,it will be less than optimal level.

Rahul Sunny answered 2 years ago
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