Asked by

Amrit Butter
on Dec 11, 2024

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If pollutants emitted by firms in the steel industry increase, but there is no increase in the costs borne by these firms, you could conclude that

A) pollution is not a serious problem in this industry.
B) the consumers of steel are unwilling to bear the costs of pollution generated from steel production.
C) pollution is an externality in this market, since producers and purchasers of steel do not bear the full costs of the pollution.
D) pollution creates an external benefit rather than an external cost in this case.

Pollution

The contamination of the natural environment with harmful substances or energy, leading to adverse effects on living organisms and ecosystems.

Externality

An economic side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in market prices, either positively or negatively.

Steel Industry

A sector of the economy that deals with the production, distribution, and consumption of steel products.

  • Recognize the position and effect of externalities on market outcome performance.
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Raphael BoaventuraDec 15, 2024
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