Before the rise of affordable automobiles and subways, many people used trolleyssmall trains on rails that ran

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Before the rise of affordable automobiles and subways, many people used trolleys—small trains on rails that ran along ordinary streets—to get around in urban areas. On trolleys, there is a literal “free rider problem”: since the trains were right next to sidewalks, and since trolleys were wide open and never had doors, people could hop on and off very easily. How much money will a trolley lose if it is easy to ride for free? If “free riders” are a big problem, what will happen to the supply of trolley rides? What are a few things the trolley industry could do to solve the problem of free riders?
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Modern Principles of Economics

ISBN: 978-1429278393

3rd edition

Authors: Tyler Cowen, Alex Tabarrok

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