Merit goods are those goods whose consumption leads to positive externalities. With this reference, consider the following statements:
1. Merit goods are characterised by nonrivalry and non-excludability in consumption
2. The social benefit resulting from merit goods/services is much greater than the sum of private benefits to individual consumers
Which among the above statements is / are correct?
A rival (subtractable) good is a good whose consumption by one consumer prevents simultaneous consumption by other consumers. Merit goods are non-rival in nature.
This question is a part of GKToday's Integrated IAS General Studies Module