Micro Foundations · intermediate
What moves on the Public Goods & the Free-Rider Problem diagram
Cheaper provision shifts MC right, raising the efficient quantity. Technology can shrink the cost of the problem but not the free-rider logic itself.
Providing the good used to require expensive infrastructure.
New technology (think satellites replacing lighthouses) makes each unit far cheaper to supply.
The marginal costmarginal costThe cost of producing one more unit. curve shifts down and right.
Both the market quantity and the social optimum rise, but the free-rider gap between them remains.
Examiners ask this as: cheaper technology, drones, satellite monitoring, cost falls, provision gets cheap.
Other scenarios on Public Goods & the Free-Rider Problem