Could you please advise how fixed cost affect pricing strategy?
I had an example with an electricity supplier to identify pricing strategy. I had two types of consumers, small and large, and the following example given:
1. small consumer - cost per 1mwat/hour - 1.3 EUR, large customer cost per 1mwhat/hour - 0.1 EUR
2. total fixed cost - 1 Million EUR
3. Total electricity consumption- 10 million
Question is, what pricing strategy?
It is definitely clear that larger there should be two pricing for each customer group. But I am not sure how fixed cost affect pricing in this example?