Free Rider Problem
The free rider problem occurs when a good's non-excludability allows people to benefit without paying. This creates a market failure because private providers cannot charge consumers and cannot fund provision.
Real World
The BBC World Service broadcasts globally, and listeners in any country can tune in without paying. No one can be excluded from receiving the signal, so many enjoy it without contributing to its funding through UK taxation.
Exam Focus
Always link free riding to non-excludability specifically — examiners reward precise use of public good characteristics.
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