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The electricity market operator of Australia, AEMO, perceived that the wholesale equilibrium market prices determined are actually unsustainable and therefore symbolises a market failure. It

The electricity market operator of Australia, AEMO, perceived that the wholesale equilibrium market prices determined are actually unsustainable and therefore symbolises a market failure. It therefore decided to intervene in the market by setting a price ceiling $300/MWh. Explain the resulting distortions as a result of this mandatory pricing rule that the AEMO introduced.

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