Suppose That a Steel Factory Emits a Certain Amount of Air

question 98

Multiple Choice

Suppose that a steel factory emits a certain amount of air pollution and that this pollution constitutes a negative externality.If this market is not required to internalise this externality:

• A)the supply curve would adequately reflect the marginal social cost of production
• B)consumers will be required to pay a higher price for steel than they would have if the externality were internalised
• C)the market equilibrium would not be the socially optimal quantity
• D)producers will produce less steel than they otherwise would have if the externality were internalised

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the business's operating cycle, whichever is longer.