What is the danger of overloading a circuit?

Overloading a circuit occurs when the demand for power exceeds the circuit's rated capacity. This situation can lead to excessive current flowing through the wires, which generates heat. The increase in temperature can cause the insulation around the wires to degrade, creating a significant fire hazard. Prolonged overheating can damage electrical components, cause circuit breakers to trip, or result in electrical fires, endangering both property and lives. Understanding the risks associated with overloading is crucial for maintaining safety in electrical systems.

The other options do not accurately reflect the consequences of overloading a circuit. While improving efficiency might sound beneficial, it is quite the opposite in cases of overload. Equipment upgrades are typically unnecessary if the existing circuit is properly managed, and a decrease in electrical output does not directly relate to the dangers posed by overloading.