To be able to price discriminate, a firm must
A) be able to identify and separate different types of buyers.
B) lower prices for all customers.
C) raise prices for all customers.
D) sell a product that can be resold.
E) Both answers B and C are correct.

Question

Quizplus · Accepted Answer

The ability to price discriminate depends on the firm's ability to identify and separate different types of buyers. Only then can the firm charge different prices to different buyers. Lowering or raising prices for all customers (options B and C) would not allow for price discrimination, and the ability to resell a product (option D) is not necessary for price discrimination to occur.

To Be Able to Price Discriminate, a Firm Must