By privatising, the government hoped that the incentive of higher profits would act as a reward for efficiency, meaning that more effort would be made in research and development of new techniques so as to make production more efficient. In order to pass savings onto the consumer, the electricity companies would have to work under certain restrictions imposed by the government and the electricity regulator, (OfGen), which were designed to prevent private monopolies exploiting the consumer.

The aim of this project is to investigate to what extent the industry has changed since these changes were implemented and how the price of electricity to consumers has been affected by these changes.

The privatisation of this industry has seen four main stages:

Firstly, British Electricity, a government run industry which was effectively a public monopoly ran from the 1960's

7. The consumers' aim is to maximize satisfaction from a limited income. The aim of the firm is to maximize profits by charging the highest available price

By examining the features of different types of market structure as follows, I hope to establish what type of market the British electricity is based upon.

Some common words found in the essay are:
DIFFERENCEL EASTERN, P* P1, Q1 Q2, British Electricity, Monopolies Monopolists, ANNUAL BILL, Perfect Competition, Economic Concepts, National Power, Oligopolies Oligopolists, price electricity, electricity industry, regional electricity, electricity companies, electricity market, stage privatisation, fall price, maximum price, electricity consumers, barriers entry, price electricity consumers, price elasticity demand, consumers willing pay, willing pay product, firms entering market,
Approximate Word count = 4585
Approximate Pages = 18 (250 words per page double spaced)