ECON 101 Lecture Notes - Lecture 3: Shortage, Auction Theory, Economic Surplus
24 Mar 2016
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1879 - light bulb was invented by thomas edison. Timeline: generation of electricity > bulk transportation of electricity > distribution of electricity. Integrated: carry out all the stages: production + Non-integrated: carry out only a certain stage. Diversity in production: wind: low capital intensity (ratio of per capita output, nuclear: high capital intensity. Ultimate perishable product (cannot share electricity: instantaneous consumption. Technology of transporting electricity was not very well understood. As the electricity travels along the wire, a portion of electricity is lost: generators needed to be located close to the users, generators build in many locations within a large metropolitan area. Permits required from municipal government in order to build up generators and string up wires. (political corruptions) Municipal government regulations determines whether a irm can enter the market. #2 state level phase (early 20th century, around wwii) Technology of generating electricity is getting better: more eos could be reaped, firms can serve a larger and larger market. o.
