Answer to Question #247450 in Economics for Leila

Question

Using examples explain the difference between merit goods and public goods and show why it is possible for profit to be made in the supply of one of these types of goods but not the other

Answer 1

In contrast to pure public goods, merit goods could be, and indeed are, provided through the market, but not necessarily in sufficient quantities to maximise social welfare.

Examples of merit goods include education, health care, welfare services, housing, fire protection, refuse collection and public parks.