Which conditions must hold if a firm is to engage in price discrimination?
A) It must be extremely difficult, if not impossible, for one consumer to resell a product to another.
B) Firms must have a sufficiently low amount of market power.
C) Consumers must have very similar preferences for the product.
D) all of the above

Question

Quizplus · Accepted Answer

For a firm to engage in price discrimination effectively, it must be difficult for consumers to resell the product to each other, preventing arbitrage. This ensures that the firm can charge different prices to different consumers based on their willingness to pay.

Which Conditions Must Hold If a Firm Is to Engage