Define usage-based pricing.

Define usage-based pricing.

• A. Customers pay a fixed amount per month regardless of usage.
• B. Customers pay a variable price depending on how much of the product or service they used during the current subscription cycle.
• C. Pricing based on the number of seats.
• D. Pricing based on the time of subscription.

Answer: (B)

Usage-based pricing charges customers based on how much of the product or service they actually use during the billing period. The bill varies with consumption: more usage means a higher price, less usage means a lower price. This aligns cost with value received and is common when usage can fluctuate, such as API calls, data transfer, or compute minutes. It lets customers scale up or down without paying a flat fee. This differs from charging a fixed monthly amount (same price regardless of use), pricing by the number of seats (fees depend on users rather than usage), or pricing tied to subscription time (based on duration, not how much is used).

Usage-based pricing charges customers based on how much of the product or service they actually use during the billing period. The bill varies with consumption: more usage means a higher price, less usage means a lower price. This aligns cost with value received and is common when usage can fluctuate, such as API calls, data transfer, or compute minutes. It lets customers scale up or down without paying a flat fee. This differs from charging a fixed monthly amount (same price regardless of use), pricing by the number of seats (fees depend on users rather than usage), or pricing tied to subscription time (based on duration, not how much is used).