A firm cannot price discriminate if
A) its has declining marginal revenue.
B) it operates in a competitive market.
C) buyers only reveal the price they are willing to pay for the product.
D) it has a constant marginal cost.

Question

Quizplus · Accepted Answer

Price discrimination requires some level of market power, which means the firm has the ability to raise prices without losing too many customers. In a perfectly competitive market, there are many firms selling an identical product, so no single firm has the power to raise prices. Therefore, price discrimination is not possible in a perfectly competitive market.

A Firm Cannot Price Discriminate If