Which rate structure charges higher prices during certain seasons to reflect seasonal demand?

• A. Uniform Rate
• B. Seasonal Rate
• C. Increasing Block Rate
• D. Decreasing Block Rate

Answer: (B)

Seasonal pricing adjusts charges based on the time of year to reflect how demand and costs change with the seasons. This makes seasonal pricing the best match for charging higher prices during peak seasons to reflect seasonal demand. The idea is that prices rise when demand is high in a particular season and may fall when demand is lower, which helps manage peak use and recover costs. In contrast, a uniform rate stays the same year-round, regardless of season; an increasing block rate changes price as total usage rises, not as seasons change; and a decreasing block rate lowers unit price as usage grows, again independent of the season.