Discussion
A two-part tariff charges the consumer for
Answer: A
Correct answer: maximum demand and energy separately
A two-part tariff splits the bill to match the way costs arise. The demand charge, in rupees per kVA or kW of maximum demand, recovers the cost of the capacity held ready for the consumer, which does not depend on use; the energy charge recovers the cost of the units actually delivered, which does.
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