Flowchart diagram illustrating the economic concepts of demerit goods, information failure, overconsumption, negative externalities, and market failure, using vapes as an example.

Okay, this is a significant deepening of the requirements. I will create a more detailed plan incorporating these points, followed by explicit schemes. (Self-Correction before starting: The key here is to be very explicit in the schemes, linking demerit goods to information failure, then to overconsumption, then to the generation of negative externalities (external costs), and finally to market failure. For taxes, the link between inelastic demand, revenue generation, and limited impact on quantity needs to be crystal clear. The opportunity cost of government spending will also be emphasized.) Revised Explicit Bullet-Point Plan: Coalition's Vaping Policy I. Introduction Coalition's policy: Legalize retail vape sales + increase tax → $3.6bn for defence; stated aim: "regulate a market 'exploited by criminals.'" Core economic issue: Vapes are demerit goods, leading to negative externalities of consumption ("serious harm," "youth addiction"), causing market failure. Commentary focus: Analyze policy's impact on this market failure, allocative efficiency, and stakeholder welfare, using article information. II. Market Failure: Demerit Goods & Negative Externalities of Consumption Demerit Goods Explained: Goods considered harmful to the consumer (e.g., vapes leading to "serious short- and long-term harm," "nicotine addiction"). Consumers often suffer from information failure: they may underestimate long-term private costs or be unaware of full addiction risks, leading them to value See more