Question: Question 2 1 Suppose that electricity producers create a negative externality equal to ( $ 6 ) per unit. Further suppose that
Question
Suppose that electricity producers create a negative externality equal to $ per unit. Further suppose that the government imposes a $ perunit tax on the producers. What is the relationship between the aftertax equilibrium quantity and the socially optimal quantity of electricity to be produced?There is not enough information to answer the question.The aftertax equilibrium quantity is less than the socially optimal quantity.They are equal.The aftertax equilibrium quantity is greater than the socially optimal quantity.
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