On hot summer days,electric-generating capacity is sometimes stretched to the limit.At these times,electric companies sometimes ask people to voluntarily cut back on their use of electricity.What would an economist recommend
A)It would be more efficient for every electric customer to have an incentive to prevent the system from overloading.
B)It would be more efficient for the electric company to raise its rates for electricity at peak times.
C)It would be more efficient to have a lottery to decide who must cut back their use of electricity at peak times.
D)It would be more efficient to enforce rotating blackouts so everyone cuts their usage of electricity by the same amount.

Question

Quizplus · Accepted Answer

An economist would recommend that the electric company raise its rates for electricity at peak times. This would create an incentive for customers to reduce their usage during those times when demand is high and supply is limited. By raising the rates, the electric company would be able to cover their costs and reduce the strain on the electric grid.

On Hot Summer Days,electric-Generating Capacity Is Sometimes Stretched to the Limit.At