Pollution occurs when lumber is produced. If the lumber market is unregulated, there would be
A) overproduction of lumber compared to the efficient amount.
B) underproduction of lumber compared to the efficient amount.
C) sometimes overproduction and sometimes underproduction of lumber compared to the efficient amount.
D) an external benefit to producing lumber.

Question

Quizplus · Accepted Answer

In an unregulated market, producers do not account for the external costs of pollution, leading to overproduction compared to the efficient amount where social costs are considered.

Pollution Occurs When Lumber Is Produced