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A block rate tariff charges each successive block of units at

  • A.a rate fixed by the consumer's demand
  • B.a rate that varies with the hour of the day
  • C.a different rate from the previous block
  • D.the same rate as the previous block

Answer: C

A declining block encourages consumption and reflects the falling average cost, while an inclining block discourages it and is used to protect small consumers. Which direction is chosen is a policy decision, not a costing one.

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