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Individual Assignment of Mexico Proposes Opening Up Electric Sector to Competition.

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Below Parts 2 and 3 contain questions relating to microeconomics and macroeconomics topics. Before you commence answering these questions, please fill in the note-taking sheet uploaded on the portal and submit together with your assignment. Please access word file “Assignment note-taking sheet” on the portal. Please read the instructions on the note-taking sheet before completing it. Please download the attached file....

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Question Preview:

Below Parts 2 and 3 contain questions relating to microeconomics and macroeconomics topics. Before you commence answering these questions, please fill in the note-taking sheet uploaded on the portal and submit together with your assignment. Please access word file “Assignment note-taking sheet” on the portal. Please read the instructions on the note-taking sheet before completing it. Please download the attached file.

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The electricity sector as controlled by the government in Mexico was a Monopoly Market. This type of market generally implies to a condition where the market is controlled by a single supplier and the rates and prices of electricity generation is under their control and not in the control of the demand and supply factors of market. The monopoly market business is not good for consumers as they are left with no choices and they end paying rates which are set as per the wishes of the monopoly supplier. Such type of markets generally does not exist due to large group of consumers facing trouble.

The Mexican government did end the 75 year monopoly electricity market and they proposed a new plan for the consumers where the private companies would now enter the market of Mexico for electricity generation where the electricity generation would now be allowed for the third party use to make the markets more dynamic for electricity generation. Such type of markets would be competitive and the consumers would be the ones who would gain from such a market type. Now the prices and quantity produced by the private companies would behave the way the consumers play a part in the consumption. The prices would vary and quantity supplied would be dependent on the prices directly. The lower the price, the higher would be the consumption and vice versa.

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