Air pollution is an external cost because it
A) is a pollution of the external environment.
B) is a cost not borne by the producer of the good.
C) benefits no one.
D) is not associated with resource use.
E) is created only when production occurs.

Question

Quizplus · Accepted Answer

Air pollution is an example of an external cost because it is a cost that is not borne by the producer of the good or service causing the pollution. Instead, the cost is paid for by society as a whole through various forms of environmental damage and health impacts.

Air Pollution Is an External Cost Because It