If the marginal private cost of producing one kilowatt of power in California equals five cents and the marginal social cost of each kilowatt equals nine cents, then the marginal external cost equals ________ per kilowatt.
A) five cents
B) nine cents
C) four cents
D) fourteen cents

Question

Quizplus · Accepted Answer

The marginal external cost is the difference between the marginal social cost and the marginal private cost, which is nine cents minus five cents, equaling four cents per kilowatt.

If the Marginal Private Cost of Producing One Kilowatt of Power