The demand for electricity varies for day and night use. We can construct a demand curve for day use (D) and for night use (N). Both demand curves are for 12 hours. Estimations indicate the following inverse demand curves: pD=20QD pN=821QN. The operating costs per kWh are 2 cents and the joint cost of providing each kWh of capacity is 4 cents per day. a.) How much capacity is needed and what are consumption rates if the regulator decided to charge a price of 5 during night and day-time use? Compute the net revenue for the utility. (4) b.) What is the optimal installed capacity? What prices should be charged during the day and night and how much capacity will be used during the night and day? (6) c.) Compute the change in consumer surplus compared to a.) for day and night-time users separately. The one-time cost to implement peak load pricing is 10 . Would it be a good idea to implement peak load pricing or not to implement the optimal installed capacity? Why or why not? (5) The demand for electricity varies for day and night use. We can construct a demand curve for day use (D) and for night use (N). Both demand curves are for 12 hours. Estimations indicate the following inverse demand curves: pD=20QD pN=821QN. The operating costs per kWh are 2 cents and the joint cost of providing each kWh of capacity is 4 cents per day. a.) How much capacity is needed and what are consumption rates if the regulator decided to charge a price of 5 during night and day-time use? Compute the net revenue for the utility. (4) b.) What is the optimal installed capacity? What prices should be charged during the day and night and how much capacity will be used during the night and day? (6) c.) Compute the change in consumer surplus compared to a.) for day and night-time users separately. The one-time cost to implement peak load pricing is 10 . Would it be a good idea to implement peak load pricing or not to implement the optimal installed capacity? Why or why not