Acoal-fired electric utility has a capacity of producing 500mw of electricity every month. to maximize its profit the firm produces 400mw of electricity in a month. kevin peters, the president of an environmental advocacy group, dais that the production at this utility is inefficient and should be reduced by 200mw the environmental protection agency (epa), however, has a different opinion. although the epa agrees that production needs to be reduced, it claims that the electric utility need not reduce production by as much as 200 mw. which of the following, if true, would support kevin's claim?
a. the marginal social cost of generating the last 200mw of electricity is higher than the marginal social benefit to consumers.
b. the private cost of electricity generation is equal to the social cost.
c. consumer surplus exceeds producer surplus when 400mw of electricity are produced. the net benefit to society is maximized when the firm produces 500mw of electricity.
d. the demand curve for electricity intersects the marginal social cost curve at the production level of 400mw.

In the fall, jay thompson decided to live in a university dormitory. he signed a dorm contract under which he was obligated to pay the room rent for the full college year. one clause stated that if he moved out during the year, he could sell his dorm contract to another student who would move into the dormitory as his replacement. the dorm cost was $5000 for the two semesters, which jay had already paid a month after he moved into the dorm, he decided he would prefer to live in an apartment. that week, after some searching for a replacement to fulfill his dorm contract, jay had two offers. one student offered to move in immediately and to pay jay $300 per month for the eight remaining months of the school year. a second student offered to move in the second semester and pay $2500 to jay. jay estimates his food cost per month is $500 if he lives in the dorm and $450 if he lives in an apartment with three other students. his share of the apartment rent and utilities will be $404 per month. assume each semester is 4.5 months long. disregard the small differences in the timing of the disbursements or receipts. what is the cost of the cheapest alternative?