The Best Example of a Demerit Good in the United

question 109

Multiple Choice

The best example of a demerit good in the United States is:

• A)clothing.
• B)education.
• C)automobiles.
• D)narcotics.

---

Definitions:

Logistics Costs

Expenses associated with managing the flow of goods from the point of origin to the point of consumption, including transportation, warehousing, and handling fees.

Inventory Carrying Costs

The total costs associated with holding and storing unsold goods or materials, including expenses such as warehousing, insurance, and spoilage.

Administrative Costs

Expenses related to the general operation of a business, such as salaries of executive officers, legal and regulatory compliance costs, and office supplies.

Marine Transport

The movement of goods or people using sea routes, involving vessels like ships and boats, integral to global trade and commerce.