When the production of a good generates external costs, the firm's supply curve will be:
A) Below the true-cost supply curve
B) Above the true-cost supply curve
C) Vertical
D) Horizontal

Question

Quizplus · Accepted Answer

When a firm's production generates external costs, it does not account for these costs in its supply curve, leading to a supply curve that is below the true-cost supply curve, which would include these external costs.

When the Production of a Good Generates External Costs, the Firm's