Question

The theory of peak-load pricing is irrelevant in industries that do not require regulation.

Answer 1

*Answer:

The theory of peak load pricing can be defined as a pricing strategy where the conusmers are charged higher prices for goods and services sold in a particular industry when the demand for the same are at its peak. For instance, the power sector which is highly regulated, the consumers of electricity are charged higher prices when the demand for electricity is at its peak in the summer seasons. The prices charged to the consumers for goods and services in particular industries or sectors are highly regulated and are monitored by an organisation or a government body, otherwise in the peak load time the consumers will be charged with any amount due to absence of regulation. Moreover, due to absence of regulations, the industries or sectors supplying goods and services to the consumers are not under any mandatory law to meet the complete demands of the consumers in the peak seasons making the theory of peak load pricing irrelevant. Thus, the theory of peak load pricing is irrelevant when it comes to industries or sectors where there exists no regulations.

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