Does peak load pricing lead to greater efficiency? Explain
Peak load pricing leads to greater efficiency. This is because consumer prices reflect the higher marginal costs of production during peak periods. Consumers have an incentive to reduce the consumption of a service when the cost of providing the service is the highest.
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If the donut industry is perfectly competitive and is in long-run equilibrium, then the price of a donut
A) is greater than marginal cost. B) is greater than short-run average cost. C) is greater than long-run average cost. D) equals long-run average cost.
Suppose a good has an external benefit and no external cost. When a competitive, unregulated market is at its equilibrium, then the
A) marginal private benefit is less than the marginal social benefit. B) marginal private benefit is greater than the marginal social benefit. C) marginal private cost is less than the marginal social cost. D) marginal private cost is greater than the marginal social cost.
Firms use advertising to
a. standardize their products b. differentiate their products c. decrease market prices d. reduce total cost e. avoid antitrust penalties
Consumers' surplus is the difference between the maximum price the buyer is willing and able to pay for a good and the actual price paid
Indicate whether the statement is true or false