The conditions for capturing more surplus from price discrimination include:
A)an ability to determine which groups of people have the greatest wealth.
B)an ability to differentiate different market segments meaning that some groups of people are willing to pay more for a product than others.
C)an ability to prevent presales of products.
D)A perfectly competitive industry structure.

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different groups of consumers based on their willingness to pay. Therefore, the ability to differentiate market segments and identify which groups are willing to pay higher prices is essential for capturing more surplus through price discrimination. The other choices, such as determining which groups have the greatest wealth or preventing presales, may be factors that help facilitate price discrimination in some cases, but they are not necessary conditions for it. A perfectly competitive industry structure may actually make it more difficult to implement price discrimination, as consumers in a perfectly competitive market will have many close substitutes to choose from and may be less willing to pay higher prices. Price discrimination involves setting different prices for different market segments, with some groups willing to pay more for a product than others. By differentiating these segments, the seller can capture more surplus. The other options (A, C, and D) do not necessarily contribute to capturing more surplus through price discrimination.

The Conditions for Capturing More Surplus from Price Discrimination Include