Market failure. Market failure market failure. Public goods. Merit goods. Imperfect competition. Current government policy on the enviroment. Waste policy in scotland. And “ zero waste plan ”.
Both, the public and private services of the economy, can provide MERIT GOODS and services. Sometimes the social benefit exceeds the private benefit – etc. the health services or education (you have to meet some certain requirements to get in first), which is the most efficiently distributed by a free market. The main concern is to maximise the benefit of the consumptions, services or goods. It is regarded by society or government as commendable public finance (it is open for the public). It has 2 characteristics. Often people do not realise the true benefit of it and they underestimate it. For example – the benefits of museums are often forgotten - the educational purpose of it, the cost of it, not only the historical part. Merit goods is a type of market failure cause they are under consumed when provided by the market, and whenever the market is not providing the optimum result – that is a failure.
The concept of EXTERNALITIES that the product's value to a consumers changes as the number of users of the product changes. There are positive and negative externalities.
Positive – the consumption or product is beneficiary to a third party. There are numerous examples of it – usage of solar systems, environmental friendly cars/ buses to cause less pollution, education leads to a good “give back to the society” - doctors, nurses, police officers, teachers etc.