Advantages And Disadvantages Of Merit Goods

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Merit goods is the goods or services provided free of charge by the government for the benefit of the society as a whole[1],Market failure( Cowen, 1988) is due to the factors such as monopoly mechanism caused the price mechanism, can't allocate resources efficiently. And market failure is also used to describe market forces cannot satisfy the condition of public interest. Because they will be available to market forces or private enterprise. For example , the health service like vaccination and education. These are commonly referred to as merit goods(Ver Eecke, 2007) , because the people can get benefit from that and don’t need pay to government. And the merit goods have the problem of insufficient supply and demand. But the consumers sometimes…show more content…
Including a variety of incomplete factors, such as monopolistic competition’.[2] The characteristics of monopoly(Robinson, 1941) are : there have only one firm in the industry , and the company can control over the price of the product , and other company is difficult yo enter the industry. So the government should control the imperfect markets and establish regulations to protect the consumers , because the monopoly make the other company access to the industry become difficult ,and if government want to stimulate the economy , they need to let more company in same industry , it will make the market have more competitive. The existence of externalities (Holtermann, 1974) mean the production and consumption that person or company produced has brought both harm and benefits to individuals and social. And the optimal output level is lower than market equilibrium quantity. For example , the smoky people will produce second-hand smoke , it will harm the people around them , however they will not get punishment, so for government , they need to internalize externality like to increase tax revenue and make laws and regulations , because they need to ensure the interests of most people. Like government can publish the policy to ban on…show more content…
Because of the industrial revolution, UK have used large amount of coal, and large number of households burning coal heating , it make the soot emissions increased dramatically. Because the combustion of coal will produce carbon dioxide, carbon monoxide, nitrogen dioxide, sulfur dioxide, and other substances. These substances will attach to air, when people imbibe it, it will endanger the health of residents. In order to solve the air pollution , British government introduced a number of policies: Article 1993 of the Clean Air Act gives local authority control and treatment of black smoke from the chimney and industry and trade places and the power of the harmful smoke. These powers include approval installing new furnace and chimney height. They can set up smoke control area, don't allow the chimney smoke.. They also can handle the use or unauthorized use than other fuels fireplace and exemption from home buying

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