Three necessary conditions must be met before a seller can practice third-degree price discrimination.The conditions are: buyers must be separated into groups or submarkets according to their elasticities of demand,the seller must possess some degree of monopoly power,and
A) the seller must prevent transfer of sales between the groups or submarkets.
B) the seller must have "market dominance".
C) the buyer must have profit maximization as a goal.
D) the buyer must have variable costs that have to be recovered.

Question

Quizplus · Accepted Answer

The condition that the seller must prevent transfer of sales between the groups or submarkets is necessary to ensure that buyers cannot take advantage of different prices in different submarkets. If buyers are able to transfer their purchases between submarkets, the seller cannot successfully price discriminate. The other choices are either incorrect or irrelevant to the conditions needed for third-degree price discrimination.

Three Necessary Conditions Must Be Met Before a Seller Can