The table below shows the marginal private and external benefits and the marginal private and external costs of a product at the free market equilibrium level of output.
| £ | |
|---|---|
| Marginal private benefit | 15 |
| Marginal external benefit | 0 |
| Marginal private cost | 15 |
| Marginal external cost | 8 |
Government intervention in this market could improve the allocation of resources because the product is most likely to be
a public good.
a demerit good.
a normal good.
a merit good.
