In two-part tariff, the ____ charges depend upon the maximum demand of the consumer and the ____ charges depend upon the number of units consumed by the consumer.

• A. fixed, semi-fixed
• B. semi-fixed, running
• C. running, fixed
• D. fixed, running

Answer: (D)

In this type of tariff,
The total charge is divided into two components:
fixed charges and running charges.
The fixed charges depend upon the number of units consumed by the consumer.
It can be expressed as
Total Cost = [A (kW) + B (kWh)] Rs.
A = charge per kW of max demand (A is a constant which when multiplied with max demand (kW) gives the total fixed costs.)
B = charge per kWh of energy consumed (B is a constant which when multiplied with units consumed (kWh), gives total running charges.)