Merit goods are ?
Correct answer: B. Under provided in the free market economy
- A. Not provided in the free market economy
- B. Under provided in the free market economy
- C. Over provided in the free market economy
- D. Provided free
Explanation
Merit goods such as education and healthcare provide benefits that consumers may undervalue, including wider social benefits. Consequently, they tend to be underprovided and under-consumed in a free market.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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