First Rate Corporation emits airborne pollutants in connection with the production of its product. If there is no government regulation, it is likely that the amount of pollutants emitted by the corporation will be:

Question

Quizplus · Accepted Answer

In the absence of government regulation, First Rate Corporation has no incentive to limit the amount of pollutants it emits as there are no penalties or costs associated with emitting pollutants beyond the production costs. Therefore, the corporation is likely to emit more pollutants than the efficient amount, causing negative externalities and harming society.

First Rate Corporation Emits Airborne Pollutants in Connection with the Production