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The firms in which paper is produced have negative external effects on the earth and people. To work a factory energy from burning fuels releases toxic gasses that pollute the air and could even harm peoples health.
Fossil fuels are becoming scarce and could soon runout so people are looking for alternative renewable energy sources such as water or wind.
The smoke from factories pollutes the air in the cities and blackens the walls of the monuments and houses causing their eventual erosion. so the government can put laws and regulations on the factories to make them out of the cities or apply taxes which can be used in the maintenance of those historic buildings.
The factory produces waste which is thrown into the rivers. The polluted rivers can affect the citizens and harm people's health if they use it for drinking or agricultural purposes. Therefore Marginal personal cost is smaller than Marginal social cost.
The government should pay subsidies to the producers of the book because it is an economic use of resources but if the government fails to do this and the total social cost exceeds the total social benefit, it is an uneconomic use of resources.
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