Consumer Surplus Changing in the Transition from State Natural Monopoly to the Competitive Market in the Electricity Sector in the Developing Countries: Azerbaijan Case

Authors

  • Mayis Gulali Gulaliyev The Institute of Economics of Azerbaijan National Academy of Sciences
  • Gulshen Zahidqizi Yuzbashiyeva The Institute of Economics of Azerbaijan National Academy of Sciences
  • Gulnara Vaqifqizi Mamedova The Institute of Economics of Azerbaijan National Academy of Sciences
  • Samira Tahmazqizi Abasova Azerbaijan State University of Economics (UNEC)
  • Fariz Rafiq Salahov The Institute of Economics of Azerbaijan National Academy of Sciences
  • Ramil Ramiz Askerov The Institute of Economics of Azerbaijan National Academy of Sciences

Abstract

The objectives of the study are to analyze changes in consumer surplus and protect the social interest of poor households in the transition from a state monopoly over the electricity sector to the market. For this purpose, the volume of household electricity consumption by various incomes was calculated, the electricity demand function of households and the marginal cost of generating electricity were constructed. A methodology is given for calculating the electricity demand function for households and prices in an equilibrium market. The consumer surplus and its change are calculated. As well as there are given some recommendations to reduce the social burden for certain household groups while raising prices in the transition from a monopoly to the market, and the amount for the state subsidy for poor households.Keywords: consumer surplus, producer surplus, electric power sector, pricing, marginal cost, average costsJEL Classifications: D42, L51DOI: https://doi.org/10.32479/ijeep.8909

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Published

2020-01-21

How to Cite

Gulaliyev, M. G., Yuzbashiyeva, G. Z., Mamedova, G. V., Abasova, S. T., Salahov, F. R., & Askerov, R. R. (2020). Consumer Surplus Changing in the Transition from State Natural Monopoly to the Competitive Market in the Electricity Sector in the Developing Countries: Azerbaijan Case. International Journal of Energy Economics and Policy, 10(2), 265–275. Retrieved from https://econjournals.com./index.php/ijeep/article/view/8909

Issue

Vol. 10 No. 2 (2020)

Section

Articles

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