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17 February, 23:59

In peak - load pricing,:

a. marginal revenue in the peak period is greater than in the off-peak period.

b. the sum of the marginal revenues is greater than the sum of the marginal costs.

c. marginal revenue is equal in both periods.

d. marginal revenue in the peak period is less than in the off-peak period.

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Answers (1)
  1. 18 February, 00:40
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    a. marginal revenue in the peak period is greater than in the off-peak period.

    Explanation:

    peak-load pricing: The price increase when the demand of the good is at peak, so at higher demand the price is higher. Later when the good demand decrease, the price will decrease.

    The consumer who purchases at peak pays more compared to another who acquire the good during off-peak periods.

    marginal revenue: revenue generated for the sale of another unit

    The company will set the marginal revenue equal to marginal cost.

    On peak the demand increase along with the marginal cost.

    So if marginal revenue = marginal cost

    and marginal cost peak > marginal cost off-peak

    we can declare:

    marginal revenue peak > marginal revenue off-peak
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Home » Business » In peak - load pricing,: a. marginal revenue in the peak period is greater than in the off-peak period. b. the sum of the marginal revenues is greater than the sum of the marginal costs. c. marginal revenue is equal in both periods. d.
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