After you have studied Reading Between the Lines on pp. 266–267 answer the following questions.

a. Sketch the AFC, AVC, ATC, and MC curves for electricity production using the six technologies shown in Fig. 1 on p. 267.

b. Given the cost differences among the different methods of generating electricity, why do you think we use more than one method? If we could use only one method, which would it be?

c. Explain how time-of-day pricing that succeeds in smoothing out fluctuations in production across the day lowers the average variable cost and marginal cost of generating electricity.

d Draw a graph to illustrate your answer to part (c).