Suppose your municipality charges your household a flat fee of $100 per year plus $2 per cubic metre of water used.This pricing policy is an example of

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The pricing policy described is a two-part tariff, where there is a fixed fee of $100 per year and a variable fee of $2 per cubic metre of water used. This type of pricing is commonly used by utilities or service providers to cover their fixed costs while also generating revenue from usage fees. The fixed fee covers the cost of maintaining the water supply system, while the variable fee encourages consumers to use water efficiently since they are charged based on the amount of water consumed.

Suppose Your Municipality Charges Your Household a Flat Fee of $100