-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The marginal external cost when 100 billion kilowatt hours are produced is
A) 0¢ per kilowatt.
B) 5¢ per kilowatt.
C) 10¢ per kilowatt.
D) 15¢ per kilowatt.
E) 20¢ 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 100 billion kilowatt hours are produced is
A) 0¢ per kilowatt. 
B) 5¢ per kilowatt. 
C) 10¢ per kilowatt. 
D) 15¢ per kilowatt. 
E) 20¢ per kilowatt.

Quizplus · Accepted Answer

The marginal external cost is the difference between the marginal social cost and the marginal private cost. At 100 billion kilowatt hours, if the marginal social cost is higher than the marginal private cost by 5¢ per kilowatt, then the marginal external cost is 5¢ per kilowatt.

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