Electric Companies Generally Practice Price Discrimination and Charge Higher Prices

question 244

Multiple Choice

Electric companies generally practice price discrimination and charge higher prices for electricity used for illumination and lower prices for electricity used for heat. These lower prices for electric heating result primarily from

• A)the existence of good heating substitutes.
• B)economies of scale in electric heat generation.
• C)prices for electric heat being set at the socially optimal level.
• D)strict government regulation of the price charged for electric heat.

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Definitions:

One-year Return

The total percentage return on an investment over a period of one year.

Dividend

A portion of a company's earnings distributed to shareholders, usually in the form of cash or stock.

PDQ Stock

is not a widely known key term and might refer to a specific stock symbol or an abbreviation within a particular context. Assuming it's not widely recognized, the answer would be NO.

Expected Return

The return an investor believes is most likely on an investment—that is, the investor understands that the actual return may be somewhat different in certain investments like stocks. The mean of the probability distribution of returns.