Air pollution is an external cost because it
A) benefits no one.
B) is created only when production occurs.
C) is not associated with resource use.
D) is a pollution of the external environment.
E) is a cost not borne by the producer of the good.

Question

Quizplus · Accepted Answer

Air pollution is a cost that is not directly borne by the producer of the good that causes it. Instead, it is borne by society as a whole in the form of negative health effects, reduced quality of life, and damage to the environment. This makes it an external cost, which is an economic concept that refers to a cost that is not reflected in the market price of a good or service.

Air Pollution Is an External Cost Because It