When we say that firms must be price makers in order to practice price discrimination,it means that this activity cannot occur with
A) competitive firms.
B) monopolists.
C) monopolistic competitors.
D) relatively elastic demand.
E) indistinguishable buyers.

Question

Quizplus · Accepted Answer

Price discrimination requires a certain degree of market power, which means that the firm must be able to set different prices for different groups of consumers. In a perfectly competitive market, no individual firm has the power to influence the price, as they are price takers. Therefore, price discrimination cannot occur in a competitive market.

When We Say That Firms Must Be Price Makers in Order