If firms were forced to take into account the full social costs of production, then

Question

Quizplus · Accepted Answer

Taking into account the full social costs of production means including the costs associated with pollution, such as health impacts and environmental damage. If firms were forced to do this, it would increase their production costs and potentially lead to a decrease in output. However, this would also incentivize firms to find ways to reduce their pollution levels, leading to a decrease in overall pollution. Therefore, both output and pollution levels would decrease.

If Firms Were Forced to Take into Account the Full