With Peak-Load Pricing, a Firm

question 98

Multiple Choice

With peak-load pricing, a firm

• A)charges more for a good during periods of high demand.
• B)charges more for a hotel room the higher up the mountain it is.
• C)charges less for a good during periods of high demand, because of regulatory reasons.
• D)is generally used during January and February.

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Definitions:

Close Substitutes

Products or services that can easily replace each other in the eyes of the consumer, having a high degree of interchangeability.

Socially Optimal Output

The level of production of goods and services that leads to the maximum possible economic efficiency and welfare in society, considering both benefits and costs.

Ceiling Price

A legally established maximum price that can be charged for a good or service, intended to protect consumers.

Pure Monopolist

A single seller in a market that sells a product for which there are no close substitutes, controlling the entire supply and influencing price.