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1 page/β‰ˆ275 words
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Style:
APA
Subject:
Mathematics & Economics
Type:
Essay
Language:
English (U.S.)
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Topic:

The "Free-Rider" Problem: Possible Benefits and Risk of Financial Loss

Essay Instructions:

Please respond to the two discussions below using these instructions: Read other students' posts and respond to at least two other students.
In addition to other comments you may have, address the following in your response posts:
What potential benefits do other students foresee as a result of this "free-rider" issue?
Do those benefits outweigh the financial loss being disputed?
Use any personal experience, if appropriate, to help support or debate other students' posts. If differences of opinion occur, debate the issues professionally and provide examples to support your opinions.
I have included the topic. Please keep each one separate.
Topic: A famous singer plans to perform a concert at a football stadium in the heart of a large city. The stadium has several high-rise buildings around it and hundreds of people in the upper floors of these buildings can potentially see inside the stadium.
Step 2 Discuss the distribution and delivery of public goods.
Address the following in your response:
Explain the "free-rider" problem in the context of this performance.
Describe the nature of the concert as a public good.
If you were in charge of ticket sales for this concert, how would you respond to a situation in which you had 1000 tickets left over the day before the show?
What would be your plan to maximize profits? How can external benefits be realized through the delivery of a public good or service?
First response:
In this case with the concert at the stadium the people in the upper floors of the high-rise buildings will receive the benefits from the resources or services without contributing or paying for the cost of the benefit, this would be consider “free-rider.”
The nature of the concert as a public good is known as the natural monopoly goods. It's a good that is non-rivival but excludable. With a concert more people don't decrease the enjoyment of the others; also people can be excluded if they don't pay for the benefits of the service.
If I had 1000 tickets left a day before the concert I would probably give an incentive to sale these tickets by using the free rider program, which is get two tickets for the price of one. Someone will be able to benefit from the concert without paying the full price.
I would reduce direct cost, negotiate lower prices with my suppliers in order to maximize by profits.
Second response:
Economists hate free riders. A free rider is a person who receives the benefit of a so-called public good without paying for it. Economists define a public good using complicated words for simple ideas. The two big words are "nonrivalrous" and "nonexcludability"
The concert is considered a good because the people who attend are the ones benefiting from it. A public good is both nonrival and nonexcludable. A public good can be consumed simultaneoulsy by everyone and no one can be excluded from enjoying the benefit. So the people living in the surrounding area get to benefit from this public good. It is true, though, that the concert will create a free rider problem, because there is no incentive for people to pay for what they consume.

Essay Sample Content Preview:
The "free-rider" issue
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The "free-rider" issue
First Response
In regard to the "free-ride" problem, this student has responded appropriately by claiming that the people residing in the high-rise's upper floors will be able to get free benefits from the services without making any contribution to the services or resources. This is indeed a problem in that when such people receive the benefits catering for the cost of such benefits, the singer may not realize the main objective of holding the concert- the financial gains from the concert. However, this student has inappropriately described the nature of the concert as a public good. In this case, the student has wrongly referred to the nature of the public concert as a natural monopoly of goods. Besides, the student again went wrong by claiming that a public good is a good that is "non-rival but excludable". The true definition ...
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