The Black Ash Steel Company's plant belches large quantities of noxious fumes and black ash into the air. Residents in the surrounding area have higher medical bills because of Black Ash's pollution. These additional medical costs represent

Question

Quizplus · Accepted Answer

The additional medical costs borne by the residents are a consequence of the pollution caused by Black Ash Steel Company's plant, which is a clear example of the negative externalities. These negative effects are not reflected by the company's private costs, and thus, the neighboring families are facing external costs that are not accounted for by the firm.

The Black Ash Steel Company's Plant Belches Large Quantities of Noxious