An item that otherwise would function as a private good, yet society determines it wishes to promote consumption of the item through government intervention in the marketplace, is known as:

Question

Quizplus · Accepted Answer

A merit good is an item that has positive externalities, or benefits to society, but may not be consumed at an optimal level due to private markets underproducing it. Government intervention is therefore necessary to promote its consumption.

An Item That Otherwise Would Function as a Private Good