Figure 9.8 -Figure 9.8 Depicts a Market for Electricity. Assume Electricity Production

Figure 9.8
-Figure 9.8 depicts a market for electricity. Assume electricity production incurs external costs. If the government imposes a pollution tax $T per mega kilowatt,

A) the equilibrium price of electricity increases but the equilibrium output decreases.
B) the equilibrium price of electricity decreases but the equilibrium output increases.
C) both the equilibrium price and output increase.
D) both the equilibrium price and output decrease.