In order for price discrimination to take place, the firm must be able to subdivide the market into groups of people with different price elasticities of demand.

Question

Quizplus · Accepted Answer

Price discrimination requires the ability to segment the market into groups with differing price sensitivities or elasticities of demand, so that different prices can be charged to different groups based on their willingness to pay.

In Order for Price Discrimination to Take Place, the Firm