Unit 2.8(2): Market failure - merit goods and demerit goods
Merit, demerit, and public goods are all associated with significant market failure. When this happens, state intervention is important to correct these market failures. Professor Richard Musgrave (UCLA) extensively developed the concepts of merit, demerit, and public goods. His analysis of these goods illustrates why governments need to intervene in certain markets. The link to the attached pdf is revision material...