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

Price discrimination involves charging different prices to different groups of consumers for the same product, based on their willingness to pay. For long-run price discrimination to be effective, a monopolist must be able to segment the market into distinct groups with different price sensitivities (elasticities) and prevent the resale of the product between these groups, ensuring that each group pays the price intended for them.

To Practice Long-Run Price Discrimination, a Monopolist Must