Under Peak-Load Pricing,the Price in Each Period Is Set

question 59

Multiple Choice

Under peak-load pricing,the price in each period is set:

• A)equal to the average cost of production in that period.
• B)above the marginal cost of production in that period.
• C)where the marginal cost intersects the demand for that period.
• D)where the average cost intersects the demand for that period.

---

Definitions:

Cross-Price Elasticity of Demand

An indicator of how the demand for one product shifts following a change in the cost of a separate product.

Midpoint Method

A technique used in economics to calculate the elasticity of demand or supply between two points on a curve, which averages percentages of change in quantity and price.

Price Elasticity of Supply

The measure of how the supply quantity of a product is affected by changes in its price is known as the price elasticity of supply.

Time Horizon

Describes the length of time over which an investment, project, or policy is evaluated or expected to have an impact.