To practice effective price discrimination, a monopolist must be able to:
A) avoid detection by government regulatory agencies.
B) calculate the utility level of each buyer in the market.
C) distinguish between buyers who are in the market and others who would enter the market if the price were increased.
D) determine whether there are differences in demand elasticities among buyers.

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different consumers for the same product, based on their willingness to pay. This requires understanding the differences in demand elasticities among buyers, as it allows the monopolist to charge higher prices to those with inelastic demand and lower prices to those with elastic demand.

To Practice Effective Price Discrimination, a Monopolist Must Be Able