09 Jul A day in the electricity market
A day in the electricity market consists of off-peak hour and semi-peak/peak hour. The new peak hour demand is Q=10,000 – 100P.
1. calculate daily profits for each plant in the new market
2. what value does the Lerner index have during peak hours for a marginal plant?
3. how much capacity can we withhold if we profitably exercise any market power during peak hours? how much does it increase peak hour profits?
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