Pollution

Question

Pollution

Quizplus · Accepted Answer

Pollution creates a negative externality because it imposes costs on individuals and society that are not reflected in the market price. The polluter does not bear the full cost of pollution, which leads to an inefficient allocation of resources and harm to public health and the environment. Property rights and capitalism can play a role in addressing pollution, but they are not the root cause. Air and water are often considered public goods rather than privately owned resources, which complicates attempts to regulate pollution.