Three necessary conditions must be met before a seller can practice third-degree price discrimination. The conditions are: buyers must be separated into groups or submarkets according to their elasticities of demand, the seller must possess some degree of monopoly power, and
A) the seller must prevent transfer of sales between the groups or submarkets.
B) the seller must have "market dominance".
C) the buyer must have profit maximization as a goal.
D) the buyer must have variable costs that have to be recovered.

Question

Quizplus · Accepted Answer

The seller must prevent transfer of sales between the groups or submarkets to ensure that higher-priced goods or services cannot be bought at a lower price in another market and then resold, which would undermine the price discrimination strategy.

Three Necessary Conditions Must Be Met Before a Seller Can