Zephyr Professional Practice Test

In elastic pricing, what determines the cost for the customer?

1. A flat monthly fee regardless of usage

2. The customer's actual usage of services

3. The total number of users in a company

4. A fixed annual subscription rate

The correct answer is: The customer's actual usage of services

In elastic pricing, the cost for the customer is determined by their actual usage of services. This pricing model allows customers to pay based on how much they utilize a service, leading to a more flexible arrangement that can adapt to varying usage levels. This is especially beneficial for customers whose needs may fluctuate over time, as they can adjust their spending according to their actual consumption rather than being locked into a static fee. When a customer uses more of a service, their costs increase accordingly, whereas reduced usage leads to lower costs. This aligns the price more closely with the value received, making it a favorable option for many businesses and individuals who require scalability in their service usage. In contrast, a flat monthly fee or a fixed annual subscription would not account for the variability in usage, which can be less economical for customers whose usage may not justify such a stable cost. The consideration of the total number of users in a company also deviates from an elastic pricing model since it entails a different pricing mechanism that typically does not reflect individual service usage levels.