Read the following case carefully and answer the questions that follow: The role and responsibilities of Nepal Electricity Authority (NEA) are growing continuously as the nation is reeling under the…

Read the following case carefully and answer the questions that follow: The role and responsibilities of Nepal Electricity Authority (NEA) are growing continuously as the nation is reeling under the unprecedented energy shortage, and NEA is the prime player of the sector. Energy lies at core of resources what needs for overall national development. NEA needs to concentrate its efforts at four fronts including improving its own financial health, consumer welfare, improving quality of its operation and services delivered and accelerated expansions to wipe out the imbalance between demand and supply. For that, it has to increase its own generation and transmission capacity as well as take lead role in making possible the cross-broader trade through development of appropriate infrastructures and mechanisms. NEA being legally empowered by the government enjoys the monopoly in the country like other firms such as Kathmandu Upatyaka Khanepani Limited (KUKL), Nepal Oil Corporation (NOC), etc. All of these natural monopolies practice policy of price discrimination. Beside these firms, other public as well as private organization also follow the policy of price discrimination as in Movie Theatre, Hospitals, Public Transport, Telecommunication, etc. NEA follow the policy of price discrimination with its consumers, which varies widely. The categories are billed as household, industries, export etc. Even within these categories, Household includes 6 different categories in terms of its consumptions under 60 Ampere category: Consumer GroupsEnergy Price/UnitUp to 20 unitsRs 6.0021 - 30 unitsRs 6.5031 - 50 unitsRs 8.0051 - 150 unitsRs 9.50151 - 250 unitsRs 9.50Above 250 unitsRs 11.00 Sometimes monopolies may charge high price in order to increase their profit. In such cases consumers may be manipulated, having no alternatives, as a result people will have adverse effect regarding the monopolies. Consumers, therefore, prefer competitive business environment. Questions: a. Why does government endorse the policy of price discrimination like to NEA? b. Does NEA apply price elasticity of demand while determining the price to the household sector? Give arguments. c. Is it justifiable to follow price discrimination in health service? Give your critical comments. d. Is it possible to follow price discrimination in a perfectly competitive market? Give reasons.