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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
The Short-Run Approach to Long-Run Equilibrium in Competitive Markets: A General Theory with Application to Peak-Load Pricing with Storage

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

Horsley, Anthony
Wrobel, Andrew J.

Paperback

Series: Lecture Notes in Economic and Mathematical Systems, Book 684

Business GeneralEconomics

ISBN10: 3319333976
ISBN13: 9783319333977
Publisher: Springer
Published: Oct 20 2016
Pages: 195
Weight: 0.66
Height: 0.44 Width: 6.14 Depth: 9.21
Language: English
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.

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