Multiple Choice
Use the table below to answer the following question.
Table 16.2.3
-Refer to Table 16.2.3. The first two columns of the table show the demand schedule for electricity from a coal burning utility; the second and third columns show the utility's cost of producing electricity. The marginal external cost of the pollution created is equal to the marginal cost.
Suppose the government levies a pollution tax such that the utility generates the efficient quantity of electricity. The pollution tax is ________ cents a kilowatt hour.
A) 2
B) 4
C) 6
D) 8
E) 10
Correct Answer:

Verified
Correct Answer:
Verified
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