Question:
Why can the Short Term Decision Excaberate Underconsumption of Merit Goods and Overconsumption of Demerit Goods?
Author: eric_galvaoAnswer:
-Sometimes only the Short term Benefits / Costs are Considered, so the Future is failed at being Considered - Not a Rational Choice? -Merit Goods Long Term Private Benefit will Outweigh their Short Term MPB, and Demerit Goods will have Greater long term MPC than their short term MPC [So therefore that’s why Demerit Goods are over consumed as Long term isn’t being Factored in]
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