If the lumber companies are required to internalize the negative externalities of deforestation, then
we should expect the equilibrium price of wooden furniture to decrease.

Question

Quizplus · Accepted Answer

Requiring lumber companies to internalize the negative externalities of deforestation, such as environmental damage, typically increases their costs. These higher costs are often passed on to consumers, leading to an increase in the price of wooden furniture, not a decrease.

If the Lumber Companies Are Required to Internalize the Negative