a. What is "private quantity" of electricity Texarkana Electric Company will produce each year?
2 million megawatts per year
Now assume the production of electricity also produces sulfur dioxide (a precursor to acid rain). The
increases by $20 for each 0.5 million megawatts produced.
b. Fill in the external marginal cost (MC external) and the social marginal cost (MCsocial columns in t
c. What is the socially optimal amount of electricity for Texarkana to produce if all costs and benefits
million megawatts per year