Microeconomics: Principles, Applications, and Tools (8th Edition)

by O'Sullivan, Arthur; Sheffrin, Steven; Perez, Stephen

Published by Prentice Hall

ISBN 10: 0-13294-886-9

ISBN 13: 978-0-13294-886-9

Chapter 16 - External Costs and Environmental Policy - Exercises - 16.2 Taxing Pollution - Page 373: 2.3

Answer

Private External

Work Step by Step

The PRIVATE cost of production is the production cost borne by the producer which typically includes the costs of labor, capital, and materials. The EXTERNAL cost of production is the cost incurred by someone other than the producer.

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