1.       You have the following information about the three electricity generation plants in Cleanland.

Source                Capacity (in GW-hour)      Marginal Cost (C$/GW-hour)

1. Coal                          4.6                                                1,310

2. Gas                            2.7                                               1,860

3. Oil                             2.0                                                 1,730

 (C$=Cleanland dollars)

The demand for electricity varies depending on the season. Cleanland has two seasons: Dry and Wet. A recent estimation of the demand is as follows:

Dry:                      Q = 14.25 – 0.005 P

Wet:                         Q = 18.3 – 0.005 P

(quantities expressed in GW-h and prices in C$/GW-h)                   
You can assume that the electricity market is perfectly competitive (and that supply and demand are constant over the day).

a.       Draw a graph showing the supply-demand equilibrium for each season. What would be the price paid by consumers in each season? What would be the surplus of each plant? What would be the consumer surplus?

b.       Assume that the government imposes a tax on the oil used as an input for electricity generation. This tax raises the marginal cost of this plant by 20%. How will this measure affect the producers and consumers? How do you think that the different producers and the consumers will react to this tax?

[此贴子已经被作者于2009-4-5 15:37:35编辑过]