One reason that firms may be unable to utilize price discrimination as a viable strategy is because
A) it is always illegal to price discriminate.
B) firms are unwilling to maximize profits.
C) most consumers' reservation prices are well publicized.
D) firms are unable to prevent resale of the product they offer for sale.
E) firms are unlikely to increase profits after paying for increased marketing costs.

Question

Quizplus · Accepted Answer

Price discrimination relies on charging different prices to different groups of consumers based on their willingness to pay. However, if consumers are able to easily resell the product or service, then the firm's ability to discriminate prices is limited. This is because consumers who are charged a lower price will simply resell the product to those who are willing to pay a higher price, eroding the benefits of price discrimination for the firm.

One Reason That Firms May Be Unable to Utilize Price