Price discrimination requires:
A) a firm to be a competitive firm.
B) a firm to be able to segment its customers based on different price elasticities of demand.
C) arbitrage.
D) that the product can be easily resold.

Question

Quizplus · Accepted Answer

Price discrimination requires a firm to be able to segment its customers based on different price elasticities of demand. This means that the firm should be able to identify different groups of customers with different levels of willingness to pay for the product. The firm can then charge different prices to these groups, maximizing profits. The other choices (A, C, D) are not necessary for price discrimination.

Price Discrimination Requires