External Costs Can Drive a Wedge Between the Market Demand

question 11

True/False

External costs can drive a wedge between the market demand curve and the social marginal WTP curve resulting in a market failure.
External costs drive a wedge between private marginal costs (i.e. ,the market supply curve)and social marginal costs.

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Definitions:

Fungicide

Chemical substances used to kill or inhibit the growth of fungi and fungal spores, commonly used in agriculture to prevent or control fungal diseases.

Chlorinated Hydrocarbons

A group of chemical compounds that contain chlorine, carbon, and hydrogen, used in industry and agriculture, and known for their persistence in the environment.

Aldrin

A potent insecticide that has been banned in many countries due to its toxic effects on wildlife and potential harm to human health.

Dieldrin

A highly toxic chlorinated hydrocarbon pesticide, banned in many countries due to its environmental persistence and potential to harm wildlife and humans.