Saeed,

I have more questions than answer. So, is it in wholesale market or retail market? the way electricity prices are produced in wholesale and retails are different.

In the wholesale market, demand is just one input, so you may find the relation but that does not tell you much.

Let's go from there.

Regards,

Jeremy

Jeremy

Thanks for your comment. I have mentioned in my question that it's a retail electricity market. In my model, the generating units are small suppliers and the transaction between the suppliers and consumers takes place in a retail market. Although the inverse-demand function can be used, I prefer another function.

Thanks,

Saeed

I would only caution that such modelling contains a lot of assumptions about the behaviour of buyers and sellers, and the results of such simulations may not translate into actual behaviour very well.