Which of the following conditions must be TRUE so that a firm can profitably price discriminate?
A)The firm must be able to identify individual or groups of consumers with different demand curves.
B)The firm must be able to identify how its consumers' demand curves differ.
C)The good cannot be easily resold.
D)All of the above.

Question

Quizplus · Accepted Answer

In order for a firm to profitably price discriminate, all three conditions mentioned in options A, B, and C must be true. The firm must be able to identify individual or groups of consumers with different demand curves, so that it can charge a higher price to those with a relatively inelastic demand and a lower price to those with a relatively elastic demand. Additionally, the firm must be able to identify how its consumers' demand curves differ, so that it can tailor prices accordingly. Finally, the good or service being sold cannot be easily resold, as this would allow consumers who are willing to pay a higher price to simply resell to others who are not willing to pay the higher price.

Which of the Following Conditions Must Be TRUE So That