Which of the following is not necessary in order for a firm to engage in price discrimination?
A)The producer must face an inelastic demand curve.
B)The producer must face a downward-sloping demand curve.
C)There must be at least two identifiable classes of consumers with different price elasticities of demand.
D)The producer must be able, at little cost, to distinguish between the different classes of buyers.
E)It must be impossible for one buyer to resell to another.

Question

Quizplus · Accepted Answer

For a firm to engage in price discrimination, it is not necessary for the producer to face an inelastic demand curve. However, the other options listed are necessary conditions for price discrimination to occur. The producer must face a downward-sloping demand curve, there must be at least two identifiable classes of consumers with different price elasticities of demand, the producer must be able to distinguish between the different classes of buyers, and it must be impossible for one buyer to resell to another.

Which of the Following Is Not Necessary in Order for a Firm