What will internalizing a negative externality cause the supply curve of an industry to do
A)shift to the right
B)shift to the left
C)expand
D)remain unchanged

Question

Quizplus · Accepted Answer

Internalizing a negative externality means that the producer is now bearing some of the cost of the externality, which will increase the cost of production. This will cause the supply curve to shift to the left, as firms are willing to supply less at every price level.

What Will Internalizing a Negative Externality Cause the Supply Curve