Methods of dealing with over-consumption/under consumption of merit/demerit goods - Answer 1. Information Provision
Left shift in demand long term
... [Show More] fashion and trends
Outreach may not be extensive enough
May not impact e.g. demerit, inferior goods-necessary when people poor/habit forming goods
More inelastic demand.
2. Subsidies/taxation
DIAGRAM ON INELASTIC GOOD
Inelastic, probably just more willing, pass on, minimal impact on producer and demand
Disproportionately affect lower income
Discuss elasticity
'Discuss efficiency of monopoly markets' (25) - Answer Point 1: Dynamic Efficency/economies of scale :) for firm and consumer
DIAGRAM OF LONG TERM FALL IN LRAC CURVE
Will monopolies lead to lower average prices as long run average costs decrease from economies of scale
Competitive market only one point is productively efficent (static)
Monopoly efficency in long term
Point 2: R + D :) for firm and consumer
More income from hiMethods of dealing with over-consumption/under consumption of merit/demerit goods - Answer 1. Information Provision
Left shift in demand long term fashion and trends
Outreach may not be extensive enough
May not impact e.g. demerit, inferior goods-necessary when people poor/habit forming goods
More inelastic demand.
2. Subsidies/taxation
DIAGRAM ON INELASTIC GOOD
Inelastic, probably just more willing, pass on, minimal impact on producer and demand
Disproportionately affect lower income
Discuss elasticity
'Discuss efficiency of monopoly markets' (25) - Answer Point 1: Dynamic Efficency/economies of scale :) for firm and consumer
DIAGRAM OF LONG TERM FALL IN LRAC CURVE
Will monopolies lead to lower average prices as long run average costs decrease from economies of scale
Competitive market only one point is productively efficent (static)
Monopoly efficency in long term
Point 2: R + D :) for firm and consumer
More income from higher prices
More research and development, more information, better quality goods, innovation and investment
gher prices
More research and development, more information, better quality goods, innovation and investment [Show Less]