1.8 The market mechanism, market failure and government intervention in markets

A key distinction between public goods and merit goods is that

public goods are non-excludable and non-rivalrous in consumption, whereas merit goods are excludable and rivalrous.

merit goods are provided exclusively by the private sector, whereas public goods are provided exclusively by the state.

public goods always generate negative externalities, whereas merit goods always generate positive externalities.

merit goods suffer from the free-rider problem, whereas public goods do not.

1.8 The market mechanism, market failure and government intervention in markets Questions

A key distinction between public goods and merit goods is that

public goods are non-excludable and non-rivalrous in consumption, whereas merit goods are excludable and rivalrous.

merit goods are provided exclusively by the private sector, whereas public goods are provided exclusively by the state.

public goods always generate negative externalities, whereas merit goods always generate positive externalities.

merit goods suffer from the free-rider problem, whereas public goods do not.