With no government action to control pollution, what is the quantity of electricity produced, the price of electricity, and the marginal external cost of the pollution generated?
The first two columns of the table show the demand schedule for electricity from a coal burning utility; the second and third columns show the utility€™s cost of producing electricity. The marginal external cost of the pollution created equals the marginal cost.

Transcribed Image Text:

Quantity Price demanded Marginal cost (cents per (kilowatts cents per kilowatt er da 500 400 300 200 100 kilowatt 10 4 12 16 20 4