The main reason firms cannot price discriminate under perfect competition is because
A) firms are price takers and cannot set prices for their goods.
B) firms cannot identify different kinds of consumers perfectly.
C) some goods are being resold in the market.
D) there is a lot of heterogeneity among consumers' tastes.
E) all firms share the same production technology.

Question

Quizplus · Accepted Answer

Under perfect competition, firms are price takers, meaning they must accept the market price for their goods and cannot set their own prices. This prevents them from charging different prices to different consumers, which is a requirement for price discrimination.

The Main Reason Firms Cannot Price Discriminate Under Perfect Competition