Assuming that Company A will generate 3M RECs in the offshore operation. Considering that the company's own consumption is 300,000 RECs/a will be used for the operation in Australia, 2,7MRECs/a will remain to be sold in the Australian market.

Question 2 - Based on Hotellin's rules.

c -Revenue will be ($40- marginal cost) x Qo RECs in 2020 and be ($50- marginal cost) x Q1 in 2040 where Qo+ Q1 = 54M RECS, r = 10%pa. Considering the marginal cost of $10 per REC, calculate and describe your calculations in words of how many RECs should be sold in the market now and how many RECs should be sold in the market in 2040 and what will be the profit in 2020 and how much will be the profit in 2040 .