Exhibit 8-2 Refer to Exhibit 8-2.If the suppliers of steel are not aware of or not responsible for the external costs,they will tend to:

Question

Exhibit 8-2  Refer to Exhibit 8-2.If the suppliers of steel are not aware of or not responsible for the external costs,they will tend to:

Quizplus · Accepted Answer

If suppliers of steel are not aware of or not responsible for the external costs, they will tend to produce too much. This is because they are not bearing the full cost of production and can sell steel for a lower price than if they had to account for externalities. As a result, they may increase production levels to maximize profits, leading to overproduction and increased negative externalities.