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6. demerit good

  • A good that posses the characteristics of non-excludability and non-rivalry in consumption
  • A good that would be over-consumed in a free market, as it brings less overall benefit to consumers than they realise
  • A good that would be under-consumed in a free market, as individuals do not fully perceive the benefits obtained from consumption

7. merit good

  • A good that would be under-consumed in a free market, as individuals do not fully perceive the benefits obtained from consumption
  • where economic agents do not properly perceive the benefits or disadvantages of a transaction
  • where the free market provides a product but with misallocation of resources

8. information failiure

  • A good that posses the characteristics of non-excludability and non-rivalry in consumption
  • where economic agents do not properly perceive the benefits or disadvantages of a transaction
  • A good that would be over-consumed in a free market, as it brings less overall benefit to consumers than they realise