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