Hand written solution is not allowed please my dear. Pollution from bright city lights makes it nearly impossible tostargaze within a city setting. The supply and demand forelectricity used in city lighting are shown in the graph.Suppose the marginal external cost for an additional kilowatt-hour (kWh) of electricity is 5 cents. Drag the endpoints of theblue line to draw in the marginal social cost (MSC) curve forelectricity. Place the black dot at the point corresponding tothe socially optimal quantity and price for electricity.Assume the government places an optimal Pigouvian tax onelectricity used at night to reduce light pollution so thatpeople can enjoy the stars.As a result of the Pigouvian tax,consumers pay a higher price for electricity at nightand producers increase output.consumers pay a lower price for electricity andproducers increase output.consumers pay a lower price for electricity andproducers lower output.consumers pay a higher price for electricity andPrice, marginal social cost of electricity (cents/kWh)50403020100MSC of Light PollutionQuantity of electricity (kWh)SD

A Pigouvian tax is a form of tax levied on goods and services that generate negative externalities.…

Pollution from bright city lights makes it nearly impossible to stargaze within a city setting. The supply and demand for electricity used in city lighting are shown in the graph. Suppose the marginal external cost for an additional kilowatt- nour (kWh) of electricity is 5 cents. Drag the endpoints of the olue line to draw in the marginal social cost (MSC) curve for electricity. Place the black dot at the point corresponding to the socially optimal quantity and price for electricity.

Pollution from bright city lights makes it nearly impossible to stargaze within a city setting. The supply and demand for electricity used in city lighting are shown in the graph. Suppose the marginal external cost for an additional kilowatt- nour (kWh) of electricity is 5 cents. Drag the endpoints of the olue line to draw in the marginal social cost (MSC) curve for electricity. Place the black dot at the point corresponding to the socially optimal quantity and price for electricity.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 3PA

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Macmillan Learning Pollution from bright city lights makes it nearly impossible to stargaze within a city setting. The supply and demand for electricity used in city lighting are shown in the graph. Suppose the marginal external cost for an additional kilowatt- hour (kWh) of electricity is 5 cents. Drag the endpoints of the blue line to draw in the marginal social cost (MSC) curve for electricity. Place the black dot at the point corresponding to the socially optimal quantity and price for electricity. Assume the government places an optimal Pigouvian tax on electricity used at night to reduce light pollution so that people can enjoy the stars. As a result of the Pigouvian tax, consumers pay a lower price for electricity and producers increase output. consumers pay a lower price for electricity and producers lower output. consumers pay a higher price for electricity and producers lower output. consumers pay a higher price for electricity at night and producers increase output. Price,…
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