To practice long-run price discrimination, a monopolist must
A) be a natural monopoly.
B) charge one price to all buyers.
C) permit the resale of the product by the original buyers.
D) be able to separate buyers into different markets with different price elasticities.

Question

Quizplus · Accepted Answer

Long-run price discrimination involves a monopolist being able to separate buyers into different markets with different price elasticities. This allows the monopolist to charge higher prices to buyers with a lower price elasticity of demand and lower prices to buyers with a higher price elasticity of demand. Natural monopoly, charging one price to all buyers, and permitting resale of the product do not necessarily relate to long-run price discrimination.

To Practice Long-Run Price Discrimination, a Monopolist Must