In order to practice price discrimination which of the following is needed ?
Correct answer: D. all of the above
- A. some degree of monopoly power
- B. an ability to separate the market
- C. an ability to prevent reselling
- D. all of the above
Explanation
Price discrimination requires market power, separate identifiable market segments, and the ability to stop buyers in the low-price segment from reselling to high-price buyers. Therefore all three conditions are needed.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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