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February 26, 2016 ENERGY ECONOMICS M.Sc. in Energy Engineering Duration: 2 hours and 30 minutes During the test students are not allowed to use class notes or textbooks or to leave the classroom Mark the exam folder with your Name, Last Name and Politecnico di Milano Id. Number At the end of the test hand over only the exam folder Name Last Name Id. Number Instructions and grading system Read the questions carefully and provide answers to all the points raised in each question. It is important to use a correct and appropriate terminology for all economic and technical terms. Remember to define all variables and parameters used in your answers. A full score will be awarded only if the answer is correct and complete. A partial score will be awarded only if the partial response, albeit incomplete, does not contain any errors. 2 1) Describe the contestable market model in a single product case. Include the relevant hypotheses, describe the attributes of the market equilibrium and use a graph to illustrate your answer (5 points). Discuss the sustainability property of the equilibrium. Illustrate your answer with a graph. (3 points). 3 4 2) Broadly speaking, what are the goals of a national regulatory authority in the energy sector? (2 points) 5 3) Within the class of linear prices, describe the Ramsey-Boiteux Pricing model. Illustrate your answer with equations and graphs. (4 points) Are these prices lower or higher than those set by a monopolist engaging in 3rd degree price discrimination? (1 point)!