Suppose that large-scale pork production has the potential to create ground water pollution. Why might this type of pollution be considered an externality?
A) The groundwater pollution reduces the cost of large-scale pork production.
B) The economic impact of a large-scale pork production facility is localized in a small geographic areb.
C) The pollution has the potential for creating a health risk for water users in the region surrounding the pork production facility.
D) Consumers will not reap the benefits of lower production cost from large-scale pork production.

Question

Quizplus · Accepted Answer

Groundwater pollution from large-scale pork production is an externality because it is an unintended side effect of the production process that affects third parties who are not involved in the transaction between the producers and consumers. In this specific case, the pollution affects the health of water users in the region surrounding the facility, which is an example of a negative externality. The other choices are not appropriate explanations for this situation.

Suppose That Large-Scale Pork Production Has the Potential to Create