Which of the following statements is true?

Question

Quizplus · Accepted Answer

Firms that can prevent reselling can engage in price discrimination as it prevents arbitrage between high-priced and low-priced markets. The other options are false. A is incorrect as perfect price discrimination requires the ability to identify and separate consumers based on their willingness to pay, which is difficult to achieve. B is incorrect as firms can price discriminate even in the presence of competition. C is incorrect as price discrimination can lead to higher profits as firms can extract more revenue from customers with a higher willingness to pay. E is incorrect as firms in a perfectly competitive market cannot set prices, let alone engage in price discrimination.

Which of the Following Statements Is True