Exhibit 17.1 -Refer to Exhibit 17.1,which Shows a Market for Electricity.If Technology

Multiple Choice

Exhibit 17.1

-Refer to Exhibit 17.1,which shows a market for electricity.If technology is fixed,the discrepancy between the market output and the efficient level of output is eliminated by _____

A) subsidizing production by $0.05 per kilowatt hour.
B) imposing a tax of $0.05 per kilowatt hour on the utility.
C) using a quota system to restrict production to 75 million kilowatt hours.
D) subsidizing production of the good by $0.10 kilowatt hours.
E) letting the utility operate freely.