If a steel manufacturer considers the costs of labor and materials, as well as the broader costs of environmental injuries resulting from its manufacturing processes,

Question

Quizplus · Accepted Answer

The manufacturer is considering the broader costs of environmental injuries, which are externalities not typically accounted for in the private costs of production. This means they are factoring in the social costs of pollution, which are costs borne by society rather than the firm itself.

If a Steel Manufacturer Considers the Costs of Labor and Materials