Which of the following best describes a multi-tiered water rate system?

A multi-tiered water rate system is characterized by variable rates that change based on different factors, typically including the volume of water consumed. This system is designed to promote water conservation by charging higher rates for higher levels of usage, effectively encouraging users to reduce their consumption to stay within lower tiers where the cost per unit is reduced.

In a multi-tiered system, households or businesses may pay a set rate for an initial level of usage, and as their water use exceeds certain thresholds, they move into higher tiers with increased rates. This provides a structured approach to pricing that reflects both the cost of water provision and the necessity to manage resources sustainably. The variability in rates aligned with usage makes this approach effective in influencing consumer behavior towards conservation, making it the most suitable description for this particular rate system.