i) With the help of a diagram, explain how this price increase will affect demand and supply of electricity? Will there be a shortage or surplus supply of electricity? ii) Following the threat of strike action by the Trades Union Congress (TUC), the government intervened to set a price ceiling and agreed to pay the difference between the price ceiling and the equilibrium price. What will happen to quantity demanded and supplied of electricity if the government fails to pay the difference between the price ceiling and equilibrium price? Will there be a surplus or a shortage in the electricity market? Explain with the aid of a diagram.

i) With the help of a diagram, explain how this price increase will affect demand and supply of electricity? Will there be a shortage or surplus supply of electricity? ii) Following the threat of strike action by the Trades Union Congress (TUC), the government intervened to set a price ceiling and agreed to pay the difference between the price ceiling and the equilibrium price. What will happen to quantity demanded and supplied of electricity if the government fails to pay the difference between the price ceiling and equilibrium price? Will there be a surplus or a shortage in the electricity market? Explain with the aid of a diagram.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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