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The Rising Demand for Electricity in California During the Year

Question 175

Multiple Choice

The rising demand for electricity in California during the year 2000:


A) prevented electricity generators from benefiting from economies of scale, lead to reduced supply, and intermittent blackouts.
B) increased the elasticity of demand for electricity generators, causing some power companies to go out of business.
C) decreased the elasticity of demand curve for electricity generators, giving the generating companies an incentive to close down plants and send electricity prices soaring.
D) made it difficult for electricity companies to use their market power to bargain down prices of key inputs, increasing the cost of electricity generation, which led to subsequent blackouts.

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