Not long ago, a conflict between a paper company and a coalition of environmental groups arose over.

Not long ago, a conflict between a paper company and a
coalition of environmental groups arose over the potential use of a Maine river
for hydroelectric power generation. As one aspect of its case for developing
the dam, the paper company argued that without hydroelectric power the energy
cost of operating five particular paper machines would be so high that they
would have to be shut down. Environmental groups countered that the energy cost
was estimated to be too high by the paper company because it was assigning all
of the high-cost (oil-fired) power to these particular machines. That
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Not long ago, a conflict between a paper company and a
coalition of environmental groups arose over the potential use of a Maine river
for hydroelectric power generation. As one aspect of its case for developing
the dam, the paper company argued that without hydroelectric power the energy
cost of operating five particular paper machines would be so high that they
would have to be shut down. Environmental groups countered that the energy cost
was estimated to be too high by the paper company because it was assigning all
of the high-cost (oil-fired) power to these particular machines. That was seen
as inappropriate because all machines were connected to the same electrical
grid and therefore drew power from all sources, not merely the high-cost
sources. They suggested, therefore, that the appropriate cost to assign to the
machines was the much lower average cost. Revenue from these machines was expected
to be sufficient to cover this average cost. Who was right?

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