Benefits arising from the consumption of a good or service that are experienced by third parties e.g. the benefits of education apply to society as much as to the recipient.
These goods are often under-provided and are called a merit good. This is because there is a divergence between the marginal private benefit and the marginal social benefit which causes individual producers to under provide the good, as the producers do not take into account the long-run benefits that this good creates for society. As a result this creates a dead weight loss triangle and market failure.
