Coal burning utilities release sulfur dioxide and nitric acid which Price of react with water to produce acid rain. Acid rain damages trees alactricity and crops and kills fish. Because the utilities do not bear the cost of the acid rain, they overproduce the quantity of electricity. This is illustrated in Figure 5-11. 23) Refer to Figure 5 -11. $1 represents the supply curve that reflects the private cost of production and Sy represents the supply curve that reflects the social cost of production. One way to internalize the external cost generated by utilities is to impose a Damand Pigovian tax on the production of electricity. What is the size of the Pigovian tax that will internalize the cost of the externality? A) P2 - Po B) P2 - P1 C) PO D) P1 - Po Quantity of electricity