If an externality of pollution exists for all manufacturers in a given industry, then all related social costs
A) are no longer represented in their supply curves.
B) continue to be represented in their supply curves.
C) are no longer represented in their demand curves.
D) continue to be represented in their demand curves.

Question

Quizplus · Accepted Answer

Externalities like pollution are costs (or benefits) that are not reflected in market prices. In this case, the social costs of pollution are not included in the manufacturers' supply curves, which only account for private costs.

If an Externality of Pollution Exists for All Manufacturers in a Given