When the production of a good generates external costs, the producing firm's supply curve will be
A)below (to the right of)the total-cost supply curve.
B)above (to the left of)the total-cost supply curve.
C)vertical.
D)horizontal.

Question

Quizplus · Accepted Answer

When a good generates external costs, the firm's supply curve, which reflects only private costs, will be below (to the right of) the total-cost supply curve, which includes both private and external costs.

When the Production of a Good Generates External Costs, the Producing