Question

This Question: 1 pt 44 of 60 (45 complete) This Test: 60 pts possib Table 1 shows the demand schedule for electricity from a coal burning utility Table 1 Price (cents per kilowatt) 4 Quantity demanded (kilowatts per day) 500 400 300 200 100 Table 2 shows the utility's cost of producing electricity and the external cost of the pollution created With no pollution control, calculate the quantity of electricity produced, the price of electricity, and the marginal external cost of the pollution generated With no pollution control, the quantity of electricity produced is kilowatts a day The price of electricity is cents a kilowatt. The marginal external cost of the pollution generated is cents a kilowatt. 12 16 20 24 Table 2 Quantity (kilowatts per day) Marginal cost Marginal external cost (cents per kilowatt) 100 200 300 400 4 4 500 10

Answer 1

Merge the two tables together we get

Price	QD	MC	MEC
4	500	10	10
8	400	8	8
12	300	6	6
16	200	4	4
20	100	2	2
24	0	0	0

With No pollution control, the quantity of electricity produced is 400 kilowatts a day.

The price of electricity is 8 cents a kilowatt.

The marginal external cost of the pollution generated is 8 cents a kilowatt.

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