When firms make decisions about output and about the amount of pollution that they produce,without government regulation
A)Firms only consider their private benefits and costs when making their choices
B)Firms choose not to pollute because it's bad for their public image
C)Social costs are always

Question

Quizplus · Accepted Answer

When firms make decisions about output and pollution without government regulation, they only consider their private benefits and costs. They do not take into account the social costs of pollution, which can harm the environment and harm public health. This is known as a market failure because the market does not take into account all of the costs and benefits of production. Without government intervention, firms will continue to produce and pollute at levels that do not reflect the full costs to society.

When Firms Make Decisions About Output and About the Amount