Self Evaluation questions
IIT Delhi, New Delhi.
Module 2:
1. The cost curve of a generator is C(q)=25q2+2000q=500INR , where C is the total cost and q is the quantity produced. What is the marginal cost of a generator at 50 MW?
2.In a perfectly competitive market, the market price can be manipulated by
  • a) A single player
  • b) Some dominant players
  • c) Nobody d. All players
3. Average cost curve of a generator is given by the function:AC(q)=(50q2+2000q+800)/q . At what generation level will the marginal cost (MC) curve meet average cost (AC) curve?
4.Marginal cost (MC) of a generator isπ(q)=5q+50INR/MW. If, for a perfectly competitive market, MCP is 100 INR/ MW, what is the marginal revenue of that generator?
5. The cumulative supply function is: . The cumulative demand function is: . Calculate supplier surplus and the demand surplus in INR.
6.Comment on which demand is ‘more price elastic’?
  • a) the one having larger absolute slope for demand function
  • b) the one having smaller absolute slope of demand function
7. Three Gencos (all having infinite power generating capacity) provide bids into market as follows:
Genco A: 10 INR / MW
Genco B: 5 INR / MW
Genco C:
Calculate MCP for inelastic demand of 10 MW.