Consider a small electricity market in the Midwest. Total generation capacity in this market is 18,000 MW. There are three types of generation technology installed in the market: nuclear, natural gas, and coal. Details for each of the technologies (before the fall in the price of natural gas) are shown in the following table: Technology Emissions rates (grams CO2/kWh) Capacity (MW) 2,000 8,000 8,000 Nuclear Coal Natural gas Marginal cost ($/MWh) 10 30 40 25 1100 600 Electricity demand in this market is assumed constant (and perfectly inelastic) at 15,000 MW. Note that 1 ton = 907,000 grams. (a) Assume this market is competitive (so that generation is dispatched in order of increas- ing marginal cost). What is the price of electricity in this market? What are the total emissions of carbon dioxide from generators in this market during one hour of operation? (b) Because of the increase in the supply of natural gas from fracking, the marginal cost of natural gas generation falls to $25/MWh. The marginal cost of nuclear and coal do not change. What is the new price of electricity in this market? What are the total emissions of carbon dioxide from generators in this market during one hour of operation? n Consider a small electricity market in the Midwest. Total generation capacity in this market is 18,000 MW. There are three types of generation technology installed in the market: nuclear, natural gas, and coal. Details for each of the technologies (before the fall in the price of natural gas) are shown in the following table: Technology Emissions rates (grams CO2/kWh) Capacity (MW) 2,000 8,000 8,000 Nuclear Coal Natural gas Marginal cost ($/MWh) 10 30 40 25 1100 600 Electricity demand in this market is assumed constant (and perfectly inelastic) at 15,000 MW. Note that 1 ton = 907,000 grams. (a) Assume this market is competitive (so that generation is dispatched in order of increas- ing marginal cost). What is the price of electricity in this market? What are the total emissions of carbon dioxide from generators in this market during one hour of operation? (b) Because of the increase in the supply of natural gas from fracking, the marginal cost of natural gas generation falls to $25/MWh. The marginal cost of nuclear and coal do not change. What is the new price of electricity in this market? What are the total emissions of carbon dioxide from generators in this market during one hour of operation? n