Like other oil-importing countries, the Republic of Korea was surprised by the rapid oil price escalation of the 1970s. Following the lead of the United States, Europe, and Japan, Korea's energy policy in the mid-1970s was based on reducing oil imports by substituting other fuels, installing...

A set of microeconomic assumptions are presented that lead to a model of the technology choices made by producers of a homogenous energy product. Under these assumptions it is possible to model the technology selection decision as being made solely to minimize product cost. Since the cost of...