Asked by Isaac Matsie on May 13, 2024
Verified
Which of the following conditions is not required for price discrimination?
A) Buyers with different elasticities must be physically separate from each other.
B) The good or service cannot be profitably resold by original buyers.
C) The seller must be able to segment the market,that is,to distinguish buyers with different elasticities of demand.
D) The seller must possess some degree of monopoly power.
Price Discrimination
The strategy of selling the same product to different customers at different prices based on their willingness to pay.
Market Segmentation
The process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into subsets of consumers (known as segments) based on some shared characteristics.
Monopoly Power
The market dominance of a single supplier, often characterized by the ability to control prices and exclude competition.
- Study the concept of price discrimination, observing its necessary conditions and impacts.
Verified Answer
NA
Nahia AkterMay 19, 2024
Final Answer :
A
Explanation :
Physically separating buyers with different elasticities is not a requirement for price discrimination. The other three conditions mentioned in the other options are necessary for price discrimination.
Learning Objectives
- Study the concept of price discrimination, observing its necessary conditions and impacts.