When an electrical utility charges higher prices during the day than at night,it is practicing:
A) peak load pricing.
B) first-degree price discrimination.
C) second-degree price discrimination.
D) third-degree price discrimination.
E) fourth-degree price discrimination.

Question

Quizplus · Accepted Answer

Peak load pricing is when a company charges higher prices during times of high demand or peak times. In this case, the electrical utility is charging higher prices during the day when there is more demand for electricity, and lower prices at night when there is less demand. This type of pricing strategy helps the utility to manage its resources more efficiently and encourages consumers to shift their usage to off-peak hours. It is not an example of price discrimination because the pricing is the same for all customers during the same time period.

When an Electrical Utility Charges Higher Prices During the Day