In the Production of Electricity with Fixed-Production Technology,the Socially Efficient

Multiple Choice

In the production of electricity with fixed-production technology,the socially efficient price is $2 and the socially efficient level of output is 400 units;the market equilibrium price is $1.50 and the market equilibrium quantity is 600 units.The marginal external cost is:

A) $0.20
B) $0.50
C) $1.50
D) $2.00
E) $3.50