Demerit goods are products or services that are considered to be harmful or less beneficial to consumers than they perceive them to be.

They tend to be overconsumed in a free market because consumers often underestimate their harmful effects or lack full information about them.

• Examples include junk food, tobacco, and alcohol.
• Overconsumption may result from imperfect information, addiction, or poor education about the product’s long-term effects.