Producers will take external costs into account when
A) they actually have to pay those costs.
B) environmental groups apply sufficient pressure and generate negative press coverage.
C) those costs are less than the benefits.
D) those costs are less than the private costs.

Question

Quizplus · Accepted Answer

Producers will take external costs into account when they actually have to pay those costs. If the external cost becomes internalized, meaning that the producer has to pay for the cost, then it becomes a private cost and is taken into consideration in their decision-making process.

Producers Will Take External Costs into Account When