Pollution occurs when lumber is produced.If the lumber market is unregulated,there would be
A)overproduction of lumber compared to the efficient amount.
B)underproduction of lumber compared to the efficient amount.
C)sometimes overproduction and sometimes underproduction of lumber compared to the efficient amount.
D)an external benefit from producing lumber.
E)no deadweight loss from producing lumber.

Question

Quizplus · Accepted Answer

Without regulation, there is no incentive for lumber producers to consider the negative externalities of pollution. Therefore, they would produce more lumber than is socially optimal, leading to overproduction of lumber compared to the efficient amount.

Pollution Occurs When Lumber Is Produced