In the absence of property rights, factories will dump waste into a waterway up to the point where _______equals _______.
A) marginal social cost; marginal social benefit
B) marginal private cost; marginal private benefit
C) marginal social cost; marginal private cost
D) marginal private cost; marginal social cost

Question

Quizplus · Accepted Answer

In the absence of property rights, factories focus on their own costs and benefits, leading them to dump waste until their marginal private cost equals their marginal private benefit, disregarding the broader social costs.

In the Absence of Property Rights, Factories Will Dump Waste