Wednesday, January 02, 2008

Unit 2: Market Failure: Demerit goods and government action: Fast food advertising ban

The BBC reports that a government ban on advertising fast food to under 16's has come in to force

http://news.bbc.co.uk/1/hi/health/7166510.stm

a) Define a demerit good
b) Why is fast food classed as a demerit good?
c) How should the advertising ban reduce the market failure?
c) To what extent do you think the advertising ban will be successful in reducing the market failure?

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