Asked by
Prasidha Parmar
on Dec 08, 2024
Verified
Relating to the Economics in Practice on page 330: By not factoring in the external costs on society resulting from an environmental disaster caused by a specific firm, the firm will most likely ________ its product, and at equilibrium, the marginal social costs of production will be ________ the price.
A) overproduce; less than
B) overproduce; greater than
C) underproduce; less than
D) underproduce; greater than
External Costs
Costs that fall on third parties who are not directly involved in a transaction or economic activity.
Marginal Social Costs
The total cost to society of producing one extra unit of a good or service, including both private costs and any externalities.
- Gain an insight into the principle of externalities and their consequences on effective market results.
Verified Answer
JC
Learning Objectives
- Gain an insight into the principle of externalities and their consequences on effective market results.