The market for electric power in Baldonia is perfectly competitive and consists of many price taking firms who generate electricity in one of three types of generating plants: some use fossil fuels (coal, natural gas, and petroleum), others use nuclear power (uranium), and a third kind uses renewable fuels (water, geothermal, wind, etc.). The structure of the industry is detailed below:

Plant Type	Average variable cost ($ per unit)	Total daily fixed cost (thousands of $ per day) capital charge excluded	Total daily capital charge (thousands of $ per day)	Daily capacity of plant (thousands of units per day)	Number of plants
Fossil fuel	5	30	10	5	30
Nuclear energy	8	30	60	30	2
Renewable fuel	12	20	20	10	10

Average variable costs are constant for any volume of output up to full capacity. Total fixed costs (capital charge excluded) are recoverable in the long-run. Any kind of new plant can be built. Once built, a plant lasts forever unless it is permanently closed down. A plant has zero salvage value. Demand is given by D(P) = 375-15P, where P is measured in $/unit and D (P) is measured in thousands of units per day.

a) What is the short-run market supply of electricity at a market price of $7 per unit?

b) What is the short-run equilibrium price and quantity for electricity on a typical day in Baldonia?

c) What is the long-run equilibrium (price and quantity) in this market? Which (and how many) firm(s) will leave? Which kind of (and how many) firm(s) will enter?

d) Let us return to the initial situation (i.e., given the number of plants of each type as in the table above). Suppose that the government decides to impose a $10 tax per unit of electricity generated using nuclear power. What is the short-run equilibrium? (price and quantity)

e) Given the $10 tax imposed in part (d), what is the long-run equilibrium (price and quantity) in this market? Which (and how many) firm(s) will leave? Which kind (and how many) firm(s) will enter?