Question

In: Economics

Briefly explain how the US came to be dominated by large, centralized AC power systems. Be...

Briefly explain how the US came to be dominated by large, centralized AC power systems. Be sure to mention the 2 major decisions that were made early on (one was technological, the other was about the business model used).

Solutions

Expert Solution

Around the 1970's, the centralized air conditioning came about to take the USA by storm. Window AC's(or single unit AC's) used to be the norm before that but people's decision regarding choosing an air conditioning unit tilted towards the centralized model,mainly because of these two aspects :
1. Techonology - Centralized AC was more energy efficient and better, i.e. once central unit would pump filtered air which was cool through ventilation ducts. The major purpose of this was to cool various rooms of a house or large office spaces through one central location that has the condenser and coils. Central AC's would also keep the temperature even around the year as it could pass cool filtered air as well as act as a centralized heating unit during winters.

2. The business model - The cost of running multiple single unit AC's in different rooms of a house or in office spaces simply meant that the cost of operating a greater number of units were way more than what the centralized AC unit promised, i.e. say there's a 3 bedroom apartment: the cost of running 3 single unit AC's were more compared to running one central unit and distribute the air through to all the rooms.

Thus, people generally started preferring centralized air conditioning units.


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