Glossary
Graduated pricing
Graduated pricing charges each tier of consumption at its own rate, so a customer pays the first tier's price for the first block of units, the second tier's price for the next block, and so on.
Also called tiered-by-bracket pricing.
It works the way income tax brackets do. Crossing a threshold only changes the price of the units above it, never the ones already consumed.
It produces a smoother cost curve than volume pricing and avoids the situation where consuming more lowers the bill.
Related terms