Assume that the marginal cost of producing steel does not include the cost of the damage to the environment as a result of pollution. By producing where P = MC, the firm will be producing

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When the marginal cost (MC) of producing steel does not account for environmental damage, the actual cost of production is underestimated. This leads to producing more steel than the efficient amount, as the social costs (like pollution) are not considered in the production decision.

Assume That the Marginal Cost of Producing Steel Does Not