If coal mining produces a negative externality in the form of polluted streams then,at the market equilibrium,the:
A)price of coal is too high.
B)quantity of coal produced is too small.
C)quantity of coal produced is too high.
D)supply curve lies to the left of the regulated supply curve.

Question

Quizplus · Accepted Answer

The mining company will not consider the costs of the negative externality and so will produce more than is socially optimal.

If Coal Mining Produces a Negative Externality in the Form