In peak- load pricing, the short- run marginal cost is equal to the marginal cost of providing capacity.

Question

Quizplus · Accepted Answer

In peak-load pricing, the short-run marginal cost refers to the cost of producing one more unit of electricity or service during peak times, while the marginal cost of providing capacity is related to the cost of adding additional capacity or infrastructure to meet peak demand. These costs are not necessarily equal, as the former deals with operational costs and the latter with capital costs.

In Peak- Load Pricing, the Short- Run Marginal Cost Is