-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the government imposes a pollution tax to achieve the efficient level of production,the tax equals ________ per kilowatt hour.
A) 0¢
B) 7.5¢
C) 10¢
D) 15¢
E) 2.5¢

Question

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the government imposes a pollution tax to achieve the efficient level of production,the tax equals ________ per kilowatt hour.
A) 0¢ 
B) 7.5¢ 
C) 10¢ 
D) 15¢ 
E) 2.5¢

Quizplus · Accepted Answer

The efficient level of production is where the marginal social cost curve intersects the demand curve. At this point, the marginal social cost is 10¢ per kilowatt hour. Therefore, the pollution tax must be 10¢ per kilowatt hour in order to achieve the efficient level of production.

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