Understand the concept of market failure and recognize key terms related to it, including public goods, merit goods, demerit goods, social benefits, external benefits, private benefits, social costs, external costs, and private costs.

Quick explanation

Understand the concept of market failure and recognize key terms related to it, including public goods, merit goods, demerit goods, social benefits, external benefits, private benefits, social costs, external costs, and private costs

• This point belongs to Market failure, especially Market failure outcomes.
• You need to be able to understand the concept of market failure and recognize key terms related to it, including public goods, merit goods, demerit goods, social benefits, external benefits, private benefits, social costs, external costs, and private costs.
• The key ideas to know are Define, Identify, and State.
• Use the linked flashcards and practice questions to check recall, then practise applying the idea in an exam-style answer.