A chemical manufacturer operating in South Yorkshire has been fined £250,000 following an illegal release of sulfur dioxide from its main processing plant. The toxic emissions drifted over nearby residential areas, leading to respiratory illnesses for over 150 local residents and forcing the temporary closure of a primary school.
Which one of the following is the most likely economic effect of the £250,000 fine?
To:
increase market failure
increase profits for the chemical manufacturer
reduce external costs
reduce government failure
