Asked by Aleksandra Papak on Sep 24, 2024

​For direct price discrimination to work,the firm

A) ​Must be able to identify members of the low value group
B) Charge the low-value group lower prices than the rest
C) Prevent the low-value group from reselling their low priced goods to higher-valued group
D) ​All of the above

Direct Price Discrimination

The practice of charging different prices to different consumers for the same product or service, based on the buyer's willingness to pay.

Low-value Group

A segment of the market or customer base that generates relatively low revenue or profit for a business, often targeted differently in marketing or pricing strategies.

Arbitrage

The simultaneous purchase and sale of an asset in different markets to profit from price differences.

  • Pinpoint the critical factors needed for successful implementation of price discrimination.
  • Grasp methods businesses use to prevent arbitrage in the context of price discrimination.