To control production costs in the face of huge intraday fluctuations in electricity demand, electricity companies often

Question

Quizplus · Accepted Answer

Producing at several plants with different operating costs allows the company to choose the most cost-effective option based on the fluctuation in demand. This helps to keep the production costs low while meeting the demand for electricity. Operating all plants at full capacity (A) may lead to excess supply during low demand, while operating all plants at less than full capacity (B) may result in higher unit production costs. Producing at one plant with the lowest possible operating cost (D) may not be sufficient to meet the fluctuating demand for electricity.

To Control Production Costs in the Face of Huge Intraday