Blyts-_
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Why are positive externalities considered to be market failure? The MSB > MPB?
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With negative externalities there is over-provision.

With positive externalities there is under-provision of merit goods. You are correct to state that the MSB is greater than MPB.

This is a market failure as there is information failure. Consumers do not fully appreciate or value accurately how much MPB they are deriving from the consumption of these services.
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MR95
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(Original post by Blyts-_)
Why are positive externalities considered to be market failure? The MSB > MPB?
considered to be a market failure because people undervalue the usage of merit goods such as education and hospitals , = market failure , where the goverement may need to intervene to correct the market failure example give out correct information failure to state that the private benefits of education are at large and that would help the economy and themselves in the long term shifting the PFF curve outwards.
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