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

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Question 48

Under a pure free market system, Service Z would experience a complete market failure and would not be provided at all, despite generating substantial net utility for society. Because of this, the state must step in to finance and coordinate its supply. Service Z is most likely a

demerit good.

merit good.

free good.

public good.

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

  1. A Level
  2. /Economics
  3. /1.8 The market mechanism, market failure and government intervention in markets