-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal external cost when 200 billion kilowatt hours are produced is
A) 0¢ per kilowatt.
B) 10¢ per kilowatt.
C) 20¢ per kilowatt.
D) 15¢ per kilowatt.
E) 5¢ per kilowatt.

Question

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal external cost when 200 billion kilowatt hours are produced is
A) 0¢ per kilowatt. 
B) 10¢ per kilowatt. 
C) 20¢ per kilowatt. 
D) 15¢ per kilowatt. 
E) 5¢ per kilowatt.

Quizplus · Accepted Answer

The marginal external cost is the difference between the marginal social cost and the marginal private cost. At 200 billion kilowatt hours, if the marginal social cost is higher than the marginal private cost by 10¢ per kilowatt, then the marginal external cost is 10¢ per kilowatt.

-The Figure Above Shows the Marginal Social Cost Curve of Generating