Merit goods differ from demerit goods because merit goods have positive externalities and demerit goods have negative externalities. Which policy intent matches this?

Merit goods differ from demerit goods because merit goods have positive externalities and demerit goods have negative externalities. Which policy intent matches this?

• A. Increase consumption of merit goods and decrease demerit goods
• B. Decrease all consumption
• C. Eliminate externalities via price controls
• D. Public provision or subsidies to increase consumption of merit goods.

Answer: (B)