Goods...?

• Scarcity
• Cross elasticity
• Income elasticity
• Exclusive, Rival Property

  These terms are pieces of the most important ecomic basis.

• By Exclusiveness and Rivality, All goods could seperate as 4 types of goods.

Conventinal Electrical Power & Energy Industry

• Conventinal Power system of Korea could be simplified like a figure above.
• All the power generated by Gen Corps, Transmitted and distributed by KEPCO and also retailed to the customer by KEPCO
• KPX exchanges power between power gen corps and power demands.

  • For Power system both of engineering and economic are important.
    • In terms of Regulation, Investment, Scheduling and Operation
    • Across the Genration, Transmission, Distribution and Markets

Demand, Supply and Market : Efficiency

• Consumer : Want low price
• Producers : Want high price
• Which is fair or efficient price??
  
• The equilibrium would be reached at this point
  
  • For this equilibrium the social welfare could be maximized

Consumer Side

• For the random point of following slope the combination (100, 10) means the consumer wants to purchase 10 unit when price is 100
  
• When the market price goes higher, than the quantity would decrease
  
• The Red Colored Area would be represented as Consumer Surplus by the combination of goods.
  

  The consumer gain that exceeds the market equilibrium price = wilingness to pay(demand curve) - market price

Producer Side

• Let's denote the market equilibrium and producer's Supply Curve in blue line
  
• Now the blue colored area would be producer's Surplus

Social Welfare

• So that, we contract goods in optimal points price and quantity. We could say the social welfare would be optimized. And also, consumer's surplus and producer's surplus are also maximized.

  Goal of Economics : Optimal Resource Allocation
  

Market Failure

There are two type of Market Failure

Not competitive

When market condition is not fully competitive, we could not guarantee the equilibrium reachable

• Market Power
  • Monopoly : Governed by Single Producer
  • Oligopoly : Governed by Few Producer

Externality

Example Carbon Emission in Ideal Market

They don't care about environmental issues. The environmental issues couldn't any effect on market equilibrium.

• In this case, we could not gurantee social welfare is maximized. Because of externality(environmental issue)

Public Ecnomics

• Publid Goods
• Market Failures

  Those two of concepts are key expressions