If pollution by one firm results in higher production costs for another firm, this would be classified as a:

Name: If pollution by one firm results in higher production costs for another firm, this would be classified as a:
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Question

Quizplus · Accepted Answer

This scenario is an example of a negative production externality, where the actions of one firm adversely affect another firm's production costs without those costs being reflected in the market price of the good or service causing the externality.

If Pollution by One Firm Results in Higher Production Costs