-According to the above figure, if steel mills ignore the cost of pollution, then the supply curve will
A) shift from S1 to S2.
B) shift from S2 to S1.
C) remain at S1.
D) shift either to the left or the right, but it is impossible to say without more information.

Question

-According to the above figure, if steel mills ignore the cost of pollution, then the supply curve will
A) shift from S1 to S2. 
B) shift from S2 to S1. 
C) remain at S1. 
D) shift either to the left or the right, but it is impossible to say without more information.

Quizplus · Accepted Answer

If steel mills ignore the cost of pollution, their marginal cost of production will decrease, leading to an increase in supply. This will shift the supply curve from S1 to S2.

-According to the Above Figure, If Steel Mills Ignore the Cost