When I buy shoes, they come in different sizes so I can choose the size that best fits. When I buy baked beans, the cans come in different sizes for the same reason. When I buy a car, the same thing applies.
And so on, through just about any/all products. The idea of one size fitting all has been largely rejected, by both buyers and sellers.
There have been sensible comments offered already, but I'd like to add one more. Sure, it is easy to understand from a buyer point of view that no-one likes to pay for more than they actually need. But from a seller point of view, the flip-side of that coin is that by having multiple price points, you don't have to give away more than necessary.
With a single price point, you are almost certainly missing out on more revenue from users who get more than normal value from your product. The Pareto Principle (the '80:20 rule') applies to this as it does to pretty much everything - 20% of your customers will use 80% of your resource; the other 80% will only use 20% of your resource.
If you have a single price, you'll of course target the 80% who are the light users and therefore likely to only pay moderate prices. But if you have a second price point, you can then come up with a higher priced product for the 20% of users who are getting 16 times as much value from your product.
Or, of course, vice versa. If you priced originally to target the 20% heavy users, you can come in with a second price point to reach the other 80%.
Note that I'm simplifying this into a binary model, but I completely agree that additional steps, and the classic 'three choice' concept, is an excellent further sophistication. Adding further options can also be helpful, as long as the end result isn't a confusing morass of options and alternatives that ends up confusing and discouraging adoption.
Lastly, may I try and make a gentle suggestion, and as politely as possible. If you really truly don't understand this multi-level pricing concept to the point of needing to ask a question that really is an utterly basic part of Marketing 101, you should be urgently adjusting the skillsets of your senior staff and bringing in someone with a marketing background.
As helpful as the people here are, you need this type of expertise inhouse and on tap, and without it, one of the huge problems is that you don't necessarily even know what questions you should be asking and what issues you should be considering.