Asked by Jacqueline Segura on Jul 03, 2024
Verified
In peak-load pricing,
A) marginal revenue is equal in both periods.
B) marginal revenue in the peak period is greater than in the off-peak period.
C) marginal revenue in the peak period is less than in the off-peak period.
D) the sum of the marginal revenues is greater than the sum of the marginal costs.
Peak-Load Pricing
A pricing strategy that sets higher prices during times of high demand and lower prices during times of low demand.
Marginal Cost
The additional charge of creating one more unit of a product or service.
- Absorb information regarding the profitability influences and the conditions necessary for peak-load pricing deployment.
Verified Answer
HT
Haley ThompsonJul 07, 2024
Final Answer :
B
Explanation :
Peak-load pricing involves charging higher prices during peak periods of demand and lower prices during off-peak periods. Therefore, in the peak period, customers are willing to pay more for the same product or service, resulting in a greater marginal revenue compared to the off-peak period.
Learning Objectives
- Absorb information regarding the profitability influences and the conditions necessary for peak-load pricing deployment.