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Choose the correct one: In a free market economy (demerit/merit) goods are over consumed

Sagot :

it will be demerit...

Merit goods have positive externalities and people do not realise it's true benefit.

ex: medicine, education

while

Demerit goods are those who harm the consumer and usually have negative externalities.

ex: liquor, smokes, drugs

As you can see these demerit goods usually are those who are over consumed by the people in any economy.

I hope it helps