Change in Production Costs of a Public Good    On the graph to the right we show the effects of a change in production costs of a public good. Such changes also arise for the usual reason. A change in the costs of inputs necessary for providing the public good or a change in the demand for another public good produced by the same government body.

   As in any supply and demand analysis, increasing costs reduce the optimal provision of the good, and decreasing costs increase optimal provision.

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