30 Apr Question: 1. Separating the production of electricity and the delivery of electricity has led to considerab…
1. Separating the production of electricity and the delivery of electricity has led to considerable deregulation of producers.
(a) Briefly explain which of these two aspects of the sale of electricity remains susceptible to natural monopoly problems.
(b) If a monopoly does arise, why is the idea of charging the marginal cost not ideal? What makes the average cost a more feasible solution?
(c) What two approaches can be used to implement an average cost pricing system?
(d) Which solution do you think is more effective?
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