A plastics manufacturing plant emits pollution into the Big River.This leads to higher costs and disruption for fishermen on the river, for which they are not compensated.In this situation:

Question

Quizplus · Accepted Answer

The pollution emitted by the plastics manufacturing plant is a negative externality, which means that the true cost of producing plastic is higher than the cost borne by the manufacturer. The pollution leads to higher costs and disruption for fishermen on the river, for which they are not compensated. Therefore, too much of society's resources are being used to produce plastic without considering the negative impact on others.

A Plastics Manufacturing Plant Emits Pollution into the Big River