2. During the week of February 22nd , Texas's power grid was put under extraordinary strain due to a long and severe cold spell. Let's explore this using supply and demand.

a. Graph the market for electricity in Texas just before the storm. Assume the supply of electricity is perfectly inelastic. Label all important points, and show the equilibrium.

b. Now, on the same graph, show how the winter storm affects the market. Label all important points, and show the equilibrium.

c. What has happened to the marginal unit of generated power, in terms of value? Do not draw a new graph; a verbal answer is sufficient.

d. In many cases, municipal and state laws prevent power suppliers from charging market-clearing prices. Assume these laws function as a price ceiling, set at the level of the initial equilibrium from part a. What will happen in the market for electricity? Do not draw a new graph; a verbal answer is sufficient.