If the social costs of refining oil are greater than the private costs of oil refining, then

Question

Quizplus · Accepted Answer

When the social costs of refining oil are greater than the private costs, it indicates that there are external costs (such as environmental damage or health issues) not being accounted for by the private companies. This discrepancy suggests that the market is overproducing oil relative to the socially optimal level, hence, there is too much oil refining.

If the Social Costs of Refining Oil Are Greater Than