If the production of a good leads to significant pollution, resulting in increased healthcare costs for the community, which of the following best explains the underlying cause of this market failure?

The underlying cause of this market failure is a negative externality, which occurs when the production of a good imposes costs on people who are not directly involved in the transaction. In this case, the pollution from producing the good harms the community's health, leading to higher healthcare costs that the producers do not pay for. This means that the true cost of producing the good is not reflected in its price, causing more of the good to be produced than is socially optimal. For example, if a factory releases harmful chemicals into the air, the community suffers from increased asthma rates, but the factory does not pay for the extra hospital visits or medications needed by affected individuals. As a result, the market fails to allocate resources efficiently, harming both public health and the environment.