If the government levies a pollution tax such that the

Question

Question: The first two columns of the table show the demand schedule for electricity from a coal-burning 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.

      Price                             Quantity                    Total cost
(cents per kilowatt)          (kilowatts per day)       (cents per kilowatt)

        4                                  500                           10

        8                                  400                            8

       12                                 300                             6

       16                                 200                             4

       20                                 100                             2

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 government's tax revenue per day?