Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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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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