The pricing of electricity based on the Locational Marginal Price (LMP) is slowly gaining popularity in Electricity Markets all around the world. In this paper, a modified optimal power flow (OPF) is considered which has the objective of minimising the cost of generation of both real and reactive power from which the LMP of real and reactive power has been obtained. When a shunt capacitor is present in the system, its investment cost is modelled as equivalent generation cost and included into the objective function. Analysis is made on the technical and economic aspects of power system under two load conditions. A novel finding has been made that during off-peak conditions, the LMPs obtained from modified OPF gives a total revenue which is less than the cost of generation, that is, it puts the generators into financial losses. In such cases, the Transmission System Operator (TSO) and the generator should bear the loss in some proportion. Also, this calls for formulation of an effective algorithm for accurate pricing of real and reactive power during off-peak load conditions.