Final answer:
Pricing impacts customer demand by influencing consumer behavior and reducing strain on the power grid during peak times.
Step-by-step explanation:
In this scenario, pricing impacts customer demand by influencing consumer behavior and consumption patterns. When the power company increases prices during peak times, it encourages customers to reduce their electricity usage or shift their usage to off-peak hours to avoid higher costs. This helps to balance the demand and prevent overloading the power grid during peak times.
For example, if the price of electricity is higher during peak hours, customers may choose to use appliances or perform tasks that require electricity during off-peak hours when the prices are lower. This behavior change helps to flatten the demand curve and reduces the strain on the power company to supply electricity to everyone at once.