Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 5, Problem 1CQ
To determine
Explain the importance to protect the producers from the non – paying customers.
Expert Solution & Answer
Explanation of Solution
In the market, if the payment is not demanded for the goods and services, then the potential customers have large incentive to attempt a free ride in an economy. If the number of non – paying customers increase, then the sales revenue of sellers will decrease and be eliminated. It will lead to a decrease in the sellers’ incentive to supply the goods in the market.
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Chapter 5 Solutions
Economics: Private and Public Choice (MindTap Course List)
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Similar questions
- Annabelle typically drives her car to school, but she lives near a bus stop and is willing to take the bus instead. If the price of a bus ticket falls, what would happen in the market for cars?arrow_forwardHow does the market structure affect the price of a good or service?arrow_forwardA loss of purchasing power due to a price increase and a decrease in the amount of one good purchased due to a decrease in price of another good to show two different effects. What are they?arrow_forward
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