Question 4:

In Question 1, you established the original equilibrium in the New

England market for electricity in December 2021 and determined the

equilibrium price (Po) and equilibrium quantity (Q₁). In Question 2

and 3 you applied two additional changes: a change that took place in

late February 2022 (Question 2) and the change expected to occur in

Winter 2022-23 (Question 3). You further found the expected final

equilibrium price (P₂) and the equilibrium quantity (Q₂).

• Considering your analysis, can you state with certainty

that Q₂ is greater than, same as, or less than Qo? Why or why

not?

• Similarly, can you state with certainty that P₂ is greater than,

same as, or less than Po? Why or why not?

If any of your predictions about the cumulative impact of these shifts

on either the equilibrium price or quantity (or both) are uncertain

(ambiguous), what will determine the final outcome? Please make

sure you relate your explanation to the graphical analysis you have

offered in Questions 2 and 3.