12 Explain why concentrated benefits and widely disbursed co

12. Explain why concentrated benefits and widely disbursed costs are such an important element in determining if local taxpayer will end up subsidizing a sports facility.

Solution

Because here benefits accrue to only those who play or watch playing sports and costs are very high, the Govt or sports authorities can\'t raise sufficient funds from these people. Here majority of people need to contribute which includes those who don\'t watch or play these sports. Since costs are high and good is public good private suppliers will not supply it. Govt will have to step in. Now Govt or local bodies or municipalities raise resources from taxes, tolls etc collected from local people, it means ultimately local taxpayer will end up subsidizing sports facility