Question: In the electricity pricing model, we assumed that the capacity level is a decision variable. Assume now that capacity has already been set at 0.65
In the electricity pricing model, we assumed that the capacity level is a decision variable. Assume now that capacity has already been set at 0.65 million of mWh . (Note that the cost of capacity is now a sunk cost, so it is irrelevant to the decision problem.) Change the model appropriately and run Solver. Then use SolverTable to see how sensitive the optimal solution is to the capacity level, letting it vary over some relevant range. Does it appear that the optimal prices will be set so that demand is always equal to capacity for at least one of the two periods of the day?
Step by Step Solution
3.34 Rating (163 Votes )
There are 3 Steps involved in it
Electricity pricing model Input data Coefficients of demand ... View full answer
Get step-by-step solutions from verified subject matter experts
Document Format (3 attachments)
1209_60bca5b286e24_564881.pdf
180 KBs PDF File
1209-M-S-D-A(8911).xlsx
300 KBs Excel File
1209_60bca5b286e24_564881.docx
120 KBs Word File
