Text

The Short-Run Approach to Long-Run Equilibrium in Competitive Markets A General Theory with Application to Peak-Load Pricing with Storage

---

The authors present a new formal framework for finding the long-run competitive market equilibrium through short-run equilibria by exploiting the operating policies and plant valuations. This “short-run approach” develops ideas of Boiteux and Koopmans. Applied to the peak-load pricing of electricity generated by thermal, hydro and pumped-storage plants, it gives a sound and practical method of valuing the fixed assets—in this case, the river flows and the geological sites suitable for reservoirs. Its main mathematical basis is the producer’s short-run profit maximization programme and its dual; their solutions have relatively simple forms that can greatly ease the fixed-point problem of solving for the general equilibrium. Since the optimal values (profit and cost functions) are usually nondifferentiable—this is so when there are joint costs of production such as capacity constraints—nonsmooth calculus is employed to resolve long-standing discrepancies between textbook theory and industrial reality by giving subdifferential extensions of basic results of microeconomics, including the Wong-Viner Envelope Theorem.

---

Availability

No copy data

Detail Information

Series Title

-

Call Number

-

Publisher

Cham, Switzerland : ., 2016

Collation

-

Language

English

ISBN/ISSN

978-3-319-33398-4

Classification

NONE

Content Type

-

Media Type

computer

Carrier Type

online resource

Edition

-

Subject(s)

Quantitative Economics
Continuous
Energy Policy, Economics and Management

Specific Detail Info

-

Statement of Responsibility

-

Other Information

Cataloger

Yd

Source

-

Other version/related

File Attachment

Comments

---

You must be logged in to post a comment