In peak- load pricing, once capacity is reached, the firm's short- run marginal cost curve becomes______ .
A)horizontal
B)vertical
C)upward sloping
D)negative

Question

Quizplus · Accepted Answer

Once capacity is reached, the firm cannot produce any more output, so the marginal cost of producing an additional unit of output is infinite. This is represented by a vertical marginal cost curve.

In Peak- Load Pricing, Once Capacity Is Reached, the Firm's