Abstract
When a utility, such as that found in Quebec, Canada, can export electricity to two markets, the interdependence between export markets is critical in determining the profit-maximizing levels and prices of exports. In this paper a model is specified which verifies econometrically that Quebec in a monopolistic fashion adds a markup term to its marginal costs of export (to the Ontario and New Brunswick-United States markets). This model is then employed to examine the comparative static impact of a rise in variable costs of generating electricity within an export market. The resultant increase in exports to this market, the rise in export prices, and the choking off of exports to the other market is quantified.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.