> Very often for water bills, you have to pay more per unit once your
> consumption goes above a certain level. This might make it seem like
> the price goes up because your quantity demanded goes up(which reverses
> the causality) and would mean an upward sloping demand curve.
> Cyril Morong
At a lower price the consume would be willing to buy more water, but the
regulated utility is offering the first amount at a subsidy, creating a
large consumer surplus. The price only goes up because it is controlled
by regulators. In other cases, it is the opposite: large users get a
volume discount.
Fred Foldvary
