Final answer:
The internalization of the external costs of pollution by refrigerator manufacturers can lead to an increase in production costs and a shift of the supply curve, potentially raising consumer prices. If the market price increases by less than the external cost, it could be due to cost-sharing between producers and consumers or improved efficiency that offsets some of the added expenses.
Step-by-step explanation:
When considering the external costs of pollution from producing refrigerators, which could be $100 per unit, the market dynamics change once these costs are internalized by firms. If firms must pay for the negative impacts their production has on health, wildlife habitat, and property values, the supply curve would shift upwards to reflect these higher production costs. This could result in each refrigerator carrying an added cost, manifesting as a higher price for consumers.
However, the actual increase in market price may vary. For instance, an increase of only $50 instead of $100 could occur due to several market factors such as partial absorption of costs by producers, shared costs with consumers, or improvements in production efficiency that offset some of the external costs. The specifics would depend on the elasticity of supply and demand, competitive market structures, and other economic variables not covered in the details provided.
Additionally, firms might invest in more energy-efficient practices, thereby reducing kWh usage and overall costs.