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From course:

Economics A Level (DONEEEEEEE)

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Question:

Why are Merit Goods Under consumed?

Author: eric_galvao



Answer:

-Free Markets ignore the Positive Externalities that Merit Goods bring about, and thus Production & Consumption will be kept Under the Optimal Level. -Imperfect Information means that Consumers will not always know what Benefits Merit Goods really give out. Therefore the Demand will not be as High as it Should be. This could even lead to a Complete Rejection, like Vaccinations.


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