Correct option is C
The cost of electrical energy generated which depends upon the maximum demand but is independent of the units generated.
It is known as the semi-fixed cost.
The semi-fixed cost is directly proportional to the maximum demand on the power plant.
It is due to the annual interest and depreciation on capital investment of building and equipment, salaries of management and clerical staff and taxes.
The maximum demand on the power station determines its size and cost of installation.
If the greater is the maximum demand on the power station, the greater is its size and cost of installation.
The taxes and clerical staff also depend upon the size of the power plant and thus upon the maximum demand.
