Assume private individuals are already providing some quantity of a public good in the absence of government intervention.If government begins to provide the public good,it is likely that:

Question

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When the government begins to provide a public good that is already being provided by private individuals or organizations, it is likely to create crowding out. This means that the private sector providers will reduce their provision of the public good as the government takes over. This may happen because individuals feel as though they no longer need to contribute since the government is providing it. Therefore, private provision will be replaced by public provision due to the crowding out effect.

Assume Private Individuals Are Already Providing Some Quantity of a Public