keannu
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- Dec 27, 2010
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- Student or Learner
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- South Korea
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❶The law of demand states that people demand less of a good as it becomes more expensive.
❷In 1990, after three years of extremely low rainfall, prices shifted to a block rate: as water supplies dried up, prices were raised in price “blocks,” and consumption dropped by 50 percent. ❸After the drought ended, water use rose, but only to 62 percent of pre-drought levels.
❹“These prices permanently changed people’s habits and attitudes,” UC Berkeley economist David Zetland wrote of Santa Barbara. ❺“People change their behavior when the price of water increases.”
❻This theory was validated in Santa Barbara, California, when, during the drought of 1987-91, the city raised water prices to help reduce consumption. ❼Before the drought hit, Santa Barbara water was priced at a flat rate, meaning that the cost did not change when people used more water.
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What does "block rate" mean here?
❷In 1990, after three years of extremely low rainfall, prices shifted to a block rate: as water supplies dried up, prices were raised in price “blocks,” and consumption dropped by 50 percent. ❸After the drought ended, water use rose, but only to 62 percent of pre-drought levels.
❹“These prices permanently changed people’s habits and attitudes,” UC Berkeley economist David Zetland wrote of Santa Barbara. ❺“People change their behavior when the price of water increases.”
❻This theory was validated in Santa Barbara, California, when, during the drought of 1987-91, the city raised water prices to help reduce consumption. ❼Before the drought hit, Santa Barbara water was priced at a flat rate, meaning that the cost did not change when people used more water.
=========================================
What does "block rate" mean here?