Locational Marginal Pricing

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Locational Marginal Pricing

Charlotte90

I am kinda confused about that video on youtube about that video on youtube: https://www.youtube.com/watch?v=sSSa93S4v8M

so the LMP with no constraints is the same in both nodes, for me it was the same because I used those offers from node 1 also in node 2 and we chose the highest offer because also those companies who wanted to sell it for 35$ will not say no if you buy it from them for 42 dollars and we do this because it is the easiest way to calculate the price so everyone is happy.....

now later in the video (from 1:48-2:37 min) the price is different in each node because of the transmission constraint but why? I mean I still just used the third package with 38$ per MWh because it is cheaper for node 2, why would I still let node 1 pay for that?

hope someone can help me here it is quite important that I understand this