Answer to Question #32728 in Economics of Enterprise for kunal Askurn

Question

distinguish between public goods and merit goods

Answer 1

The main difference is that public goods are goods that would not be provided in a free market system, because firms would not be able to adequately charge for them and merit goods are goods that would be provided in a free market system, but would almost certainly be under-provided. The main examples of merit goods are: education, health and fire service.