The external cost of carbon emissions is not included in the market supply curve of private firms.

Question

Quizplus · Accepted Answer

The market supply curve of private firms only takes into account their private costs and not external costs such as carbon emissions. This is known as a market failure and can lead to overproduction and overconsumption of goods that generate carbon emissions, resulting in negative impacts on the environment and society as a whole.

The External Cost of Carbon Emissions Is Not Included in the Market