What is a Merit good? Give and example and explain..

Merit goods are goods that are under-consumed. They provide positive externalities and so the social benefit from consumption outweighs the private benefit. Market failure occurs when merit goods are under-consumed in free market conditions; government intervention helps solve this when subsidies are applied and so the prices to consumers lower and demand for the good raises.An example of a merit good is education. Education is beneficial to the individual in the long term as they can have higher earnings. It is even more beneficial to the third parties as it can reduce unemployment, create rising incomes and raise productivity. would also show a positive externality diagram

IW
Answered by Isabella W. Economics tutor

2624 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Explain the effects of increased Tariffs on goods from the UK


What is the difference between a perfectly competitive market and a monopoly market


How can get my essays into level 5?


How would you go about calculating inflation using CPI (consumer price index)


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences