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From course:

Economics A Level (DONEEEEEEE)

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Question:

Why may Demerit Goods be over-consumed?

Author: eric_galvao



Answer:

-Free Market does not Care for the Negative Externalities and thus Production and Consumption are Above Socially Optimal Level. -Imperfect Information means that Consumers won't 100% know the Damage Internally and Externally, so, Demand isn't as Low as it Should be


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