If the user doesn't pay a marginal price for their marginal usage, they will tend to "overconsume".

Because some of the costs are borne by the provider. If the user paid for them they'd consume less.

If the margins are hefty it doesn't matter.

If the margins are thin, it matters a lot.

It's possible to for example give away more value than you earn.

This is a trap for products with an LLM feature to avoid. The marginal cost is non-trivial!