-The Figure Above Shows the Marginal Social Cost Curve of Generating

question 13

Multiple Choice

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the Coase theorem can be used in this market,output equals ________ kilowatt hours per day.

• A) 0
• B) 150 billion
• C) 200 billion
• D) 100 billion
• E) more than 200 billion

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Definitions:

Fixed Costs

Costs that do not vary with output.

Variable Costs

Costs that change as output levels change.

Marginal Costs

The additional cost incurred in the production of one more unit of a good or service.

Fixed Costs

Costs that do not change with the amount of goods or services produced, such as rent, salaries, or insurance.