Question: 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.
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.
If the government levies a pollution tax such that the utility produces the efficient quantity, what is the price of electricity, the tax levied, and the govemment's tax revenue per day?
The price of electricity is cents a kilowatt.
The pollution tax is cents a kilowatt hour.
The tax revenue is $ a day.
Remember that the price is in cents but you must answer in dollars.
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