Market structure-
The Calcutta Electric Supply Corporation or CESC is a Monopoly market as it is the only company that is supplying electrical connection to everyone in Kolkata. The entry of new firms is restricted as it’s product is completely unique. The firms Is having complete control over price of the product and so the demand curve is downward sloping and inelastic.
Price discrimination- in Monopoly there is a single seller of a product called monopolyis. CESC is having control over the pricing, demand and supply decisions this they set prices according to their own so that maximum profit can be earned.
Elasticity of demand- as the firm is showing a downward sloping demand curve marginal revenue is less than price. As it is a Monopoly CESE have less changes as compared to change in price due to lack of substitutes and competitors so here demand is inelastic.
Elasticity of supply- the electricity provided by CESE board is constant as electricity is required by everyone in the houses so whatever may be the price CESE charges the supply does not change so it is a perfectly inelastic supply curve.
Barriers to entry-
Threat of substitute products and services ( Low )
No threat of substitutes till economic viability of rooftop solar power captive power generation or diesel generation set for any other means of mitigation of energy requirement.
Threat of new entrants ( Low )
Set of new entrants arises in case a new player applying parallel licence in CESC's licenced area of 567 square kilometre.
Competitors ( Low )
No potential competitors at present . potential competition can emerge if parallel licence is granted to any other player.
For example- in Mumbai, Tata Power and Reliance Energy are competing with each other.
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