The social cost of pollution includes the private producer costs plus the costs to bystanders adversely affected by the pollution.

Question

Quizplus · Accepted Answer

The social cost of pollution is not limited to the private producer costs, but also factors in the costs imposed on third parties who are negatively affected by the pollution. These external costs are often not reflected in the private cost of production, leading to market failures and inefficiencies.

The Social Cost of Pollution Includes the Private Producer Costs