A government wants to increase the consumption of a merit good and cut the consumption of a demerit good. What policy ought it to use for each good?
- Amerit good: impose a minimum price; demerit good: produce only in the public sector
- Bmerit good: increase advertising on the benefits of the good; demerit good: put legal controls on output
- Cmerit good: confine access to certain age groups; demerit good: tax output
- Dmerit good: subsidise the good; demerit good: set a minimum level of output