Question

Cellpoint uses two-part pricing for its long-distance call charges. Because this is a service, the price is broken into a fixed fee plus a(n) ________ usage rate.

A) fixed
B) variable
C) standard
D) market
E) optional

Answer 1

B) variable

Step-by-step explanation:

Cellpoint's fixed fee should be the same for all the long distance calls, e.g. $0.15 per call.

Its variable usage rate depends on how long the call lasts, e.g. $0.10 per minute.

For example, a long distance call that lasts 5 minutes would cost (using the costs from the previous examples): fixed fee + variable usage rate = $0.15 + ($0.10 x 5) = $0.15 + $0.50 = $0.65