(a)[8]
Explain why demerit goods tend to be over-consumed and merit goods tend to be under-consumed.
(b)[12]
Discuss the extent to which introducing a maximum price in a market will benefit consumers.
Economics 9708 · AS & A Level · Government intervention in markets
Government intervention in markets — practice question
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Knowledge and understanding: demerit goods are regarded as being undesirable for consumers / worse for them than they realise.” …
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