(Don't copy the answer)The current conflict in Ukraine has prompted talk of a possible embargo on gas produced in Russia. Using diagrams, explain the likely effect that such an embargo would have on a) the market price for gas. b) the price charged to consumers by an energy company who purchases gas in the open market and provides it to UK consumers, focusing on the case where the energy market in UK is perfectly competitive. How will consumer and producer surplus be affected? c) the price charged to consumers by a monopoly energy company who purchases gas in the open market and provides it to UK consumers (hence, focusing on the case where the energy market in UK is composed of a single firm). d) Some commentators have proposed that the UK government should charge a per-unit tax to energy companies and redistribute the tax income to the British public to offset some of the negative effects of the current energy shock. What do you think would be the effect of this scheme in the case of a monopolistic energy market? Can you think of an alternative way the government could intervene in the energy market to help curb the adverse effects the current energy shock is likely to have on the average British household?
(Don't copy the answer)The current conflict in Ukraine has prompted talk of a possible embargo on gas produced in Russia. Using diagrams, explain the likely effect that such an embargo would have on a) the market
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