Merit and Demerit Goods
Merit goods refer to goods, which the society considers to be so valuable that it is imperative for everyone to have them, for instance, education (Mendoza, 2011, p. 278). An example of a merit good in the United Kingdom is education. The UK government provides merit goods for the benefit of the entire society because they would be under-provided if left to private enterprise or the market forces. Merit goods have two essential characteristics: their value is not commonly fully appreciated during consumption, and their use results in positive effects on other consumers.
Graph of merit good
The graph shows that the marginal Continue reading...