Final answer:
The internal costs of a car typically included in the market price are cost of raw materials, cost of labor, and cost of advertising, whereas the cost of pollution is an external cost not typically included in the price.
Step-by-step explanation:
The usually included internal costs of a car—costs that are factored into the market price—are cost of raw materials, cost of labor, and cost of advertising. The cost of pollution, however, is typically an external cost not included in the price. Internal costs are directly associated with the production and selling process of consumer products, which ultimately reflect in the product's market price.
Internal costs such as raw materials, labor, and advertising are the explicit costs incurred during the manufacturing and marketing stages. These costs come directly out of the manufacturer's pocket and are straightforwardly passed on to consumers within the price of the car. On the other hand, pollution represents an external cost, which refers to the broader ecological and social costs that arise from the production or use of the car but are not typically borne by the manufacturer or reflected in the purchase price.
With respect to the automobile industry, the costs of production depend greatly on scale. In the case of industries with significant economies of scale like auto manufacturing, internal costs can decrease per unit as the volume of production increases. However, if external costs like pollution were to be internalized, this could potentially increase prices and affect demand and production levels. Therefore, understanding the distinction between internal and external costs is crucial for evaluating the true economic impact of a product.