Question

If electricity is sold at the cost of generation, it may push up the costs of production of goods in many industries. What is it's impact?
(a) All units will earn huge profit,
(b) Some units will bear the cost and might face nominal loss.
(c) Many units, especially small-scale units, might have to shut down.
(d) Many units, especially small-scale units, might bloom

Answer 1

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Answer 2

Answer:

(c) Many units, especially small-scale units, might have to shut down.

Explanation:

For starters, electricity is never sold at the cost of production. The price of electricity includes, of course, a charge for generation, but it also includes a significant charge to reimburse the utility for the cost of constructing and maintaining power lines and related hardware required to transmit electric power from generation sources to the customer's location. These prices in the United States include the utility's entire cost of doing business, such as financing, taxes, administrative and general expenses, and so on. Any agency or company that provides electricity will collect all of these costs through the electricity rates it charges customers.

The correct option is (c) Many units, especially small-scale units, might have to shut down.

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