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On Hot Summer Days, Electricity-Generating Capacity Is Sometimes Stretched to the Limit

Question 130

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On hot summer days, electricity-generating capacity is sometimes stretched to the limit. At these times, electric companies may ask people to voluntarily cut back on their use of electricity. An economist would suggest that


A) every electric customer has an incentive to prevent the system from overloading, so this voluntary approach is the most efficient.
B) it would be more efficient if the electric company raised its rates for electricity at peak times.
C) it would be more efficient to have a lottery to decide who had to cut back their use of electricity at peak times.
D) it would be more efficient to force everyone to cut their usage of electricity by the same amount.

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