In the graduated pricing example, what is the total price for 20 units?

In the graduated pricing example, what is the total price for 20 units?

• A. 210
• B. 189
• C. 199
• D. 180

Answer: (B)

In graduated pricing, the unit price changes as you buy more, so the total cost is the sum of what you pay in each pricing tier you pass through up to your total quantity. To find the total for 20 units, you determine how many units fall into each tier, multiply by that tier’s rate, and add those amounts together. So for 20 units, you don’t multiply 20 by a single price—you accumulate costs across the tiers up to 20. Doing that with the given tier structure in the problem yields 189, which is why that option is correct. The other numbers would come from applying a single rate to all 20 units or from misallocating units across tiers.

In graduated pricing, the unit price changes as you buy more, so the total cost is the sum of what you pay in each pricing tier you pass through up to your total quantity. To find the total for 20 units, you determine how many units fall into each tier, multiply by that tier’s rate, and add those amounts together.

So for 20 units, you don’t multiply 20 by a single price—you accumulate costs across the tiers up to 20. Doing that with the given tier structure in the problem yields 189, which is why that option is correct.

The other numbers would come from applying a single rate to all 20 units or from misallocating units across tiers.