Country A and country B are two neighboring countries. The inverse supply and demand functions for electricity
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Question:
Country A and country B are two neighboring countries. The inverse supply and demand functions for electricity (TWh) in these two countries are given by:
Sa = 7,5+0.15Xa
Da = 21 -0.075Xa
Sb = 15+0.15Xb
Db = 24 -0.0375Xb
where Sa, is supply price in country A, Da is demand price in country A and Xa, is the corresponding volume in country A. Similar notation for country B. These functions are only valid in the ranges where both prices and quantities are non- negative. Outside these ranges prices and quantities are defined as zero.
b) What is the equilibrium price and corresponding total production when there is one common market and no constraint on transmission?
Related Book For
Managerial Economics and Business Strategy
ISBN: 978-0073523224
8th edition
Authors: Michael Baye, Jeff Prince
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