Suppose That a Steel Factory Emits a Certain Amount of Air

question 103

Multiple Choice

Suppose that a steel factory emits a certain amount of air pollution and that this pollution constitutes a negative externality. The social cost of producing the steel includes the:

• A) private costs of the steel producers and the price consumers pay for the steel
• B) private costs of the steel producers and the costs to the bystanders affected by the pollution
• C) costs to the bystanders affected by the pollution only
• D) price consumers pay for the steel

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