An environmental awareness program was launched in a certain community and all residents in the community were asked to contribute to its functioning. After a month, the program had to be discontinued due to a lack of funds

Why did the program not receive sufficient funds? Explain your answer.

A community program such as the one mentioned here is an example of a public good. Like all public goods, it is non-excludable and non-rival in consumption. None of the residents in the community can be prevented from enjoying the benefits of the program and the enjoyment of its benefits by one individual does not reduce the amount enjoyed by others. Because nobody can be excluded from its consumption, people can enjoy the benefits of the program without paying for it. Therefore, nobody in the community had an incentive to contribute to its functioning. As a result, the program had to be discontinued due to a lack of funds. This is an example of the free-rider problem in the consumption of public goods.