Document information
- University
- Politecnico di Milano
- Degree programme
- Energy Engineering
- Subject
- Energy Economics
- Classification
- Notes · Complete set
- Original format
- Text
- Searchable text
← Back
NotesComplete set
Complete course ENG and some NO
Study material for Energy Economics, shared by the Studwiz community and reviewed by moderators.
Energy EconomicsComplete set
Document information
What's included in this study material
Study material for Energy Economics, shared by the Studwiz community and reviewed by moderators.
Import quality: text was extracted directly from the original document.
Extracted content from the document
Representative passages recognised in different parts of the material. The full extracted text remains available to search, while this compact preview makes the page easier to read.
Page 1
FORMLERENERGYECONOMICS ELASTICITYOFDEMAND:How costumersare sensitivetoa changeinprice UNELASTICE<T (E,0) Sexelectricity)Fewcompetitors 7 "Ifichangepricequantitysoldis almost constant (consumersdon'tchangetheir behavior). ELASTIC ECT (ex.pasta)hotofcompetitorsIfichangepricequantitysoldvarya lot becauseconsumers willchangetheirbehaviours COSTFUNCTION: # IC TC:total costfaction MC:marginalcostfunction showmuchitcost toproducean X(q)= T,q) ADDITIONALunit. AC:averagecostfunction Pr >howmuchitcost toproducea MC unit. AC UntillMR>MCit is convenientto39 increaseq FocusforFIRMS=> PROFITMAXIMIZATION(M) *Revenues - Costs= p.q-TC(q = p.q - AC(q).q= q(p- AC) Tomaximize dr- 0 · aM((q)= 0dt with #R= 4 >howmuchIearnfromthesellofan additional unit.(marginalrevenue( Thestrategiesoffirms highlydependon theirpositioninthemarket: · PureCompetition: Firmsare pricetakersso MM= p=cost(q)sotheycan'tdecideto verypoftheir goodsbecause consumers willnotbuyfromthem anymore(12K1). Tohavethiskindofmarked. Lotsofsmallfirmsare necessarytosatisfytheoveralldemand (thequalityofthe gooddon'thavetobeimportant). Allconsumers are wellinformed NODEADWEIGHTLOSS=>We reachan EFFICIENTSOLUTION dr- O > p=rc isreachedwithout dt externalintervention IfM>0 =>firms are goingto enter the marked 1r =0 =) firmswon'tenterthemarked purecompetition Ina LONGRUNsituation in PC:M= 0 equilibriumcondition IfI'malreadyinthemarked. ↓averagevariablecosts if pAVC =>Iwill leavethemarked SHORT RUN Scomefromsame eq. p>AVC=>Iwillremaindinthemarked ↑1 leaving M remainingM- FC=> Iwillremaindinthemarked · Monopolist (2:0) Onlyone firminthemarked- ithas thepowerto DECIDEP. Desitioncome fromMAXIMIZATION ofPROFITS: dr- ⑧ >MR(q)= M((q)dt Sometimesthiskindofmarketis themostefficientavailable: NATURALMONOPOLY (ex.TransmissionofEEC This…
Preview
First page of the document.