Answer to Question #116979 in Macroeconomics for Muhammad

Question

A market for electricity is in equilibrium in bangladesh at a point where both supply and demand curves intersect each other. If the following events ( price factors or non price factor of demand or supply) take place into the market of electricity then how it will effect equilibrium point, equilibrium price and equilibrium quantity of electricity in bangaldesh. Use graphical representation for each case seperately to answer your question. Label and interpret each daigram

1. Electricity tarrifs are decreased by the government in bangladesh

Answer 1

In the presented graph, the green graph shows the electricity supply schedule in the Bangladesh market before tariff reduction, and in red - after the tariff reduction.

Tariff reduction led to an increase in the amount of electricity consumed.