If the owners of SUVs are not forced to compensate the people affected by their pollution, the market result will be

Question

Quizplus · Accepted Answer

If there is no compensation for the pollution caused by SUVs, their cost of production will be lower than it should be, as the true costs of their impact on the environment will not be factored in. This will result in a lower price for SUVs, leading to more people buying them, and therefore, too many SUVs being driven. This is because the market price is not reflective of the true cost of production, creating a market failure.

If the Owners of SUVs Are Not Forced to Compensate