The supply curve Sprivate is what firms offer when they count only their own costs and can dump their waste for free. It meets demand at E₀, 45,000 refrigerators at $650. But making refrigerators also releases pollutants that cost other people about $100 a unit in worse health, lower property values and lost habitat.
If firms have to bear that cost too, every quantity now needs a price $100 higher to be worth supplying, so the supply curve shifts up and left to Ssocial. The new equilibrium E₁ is 40,000 refrigerators at $700. Buyers pay more and fewer refrigerators are made, which is the point: the 5,000 refrigerators no longer produced were the ones whose full cost to society exceeded what anyone was willing to pay for them. The slider sets the external cost per unit.