Which of the following would prevent a pharmaceutical manufacturer from successfully using price discrimination?
A)It's customers all have the same elasticity of demand for its drugs.
B)The demand schedule for pharmaceuticals is horizontal.
C)Low-price customers could resell the drugs to high-priced customers.
D)All of the above.

Question

Quizplus · Accepted Answer

Price discrimination requires the ability to prevent buyers from reselling the product from the low-price group to the high-price group. If low-price customers can resell drugs to high-price customers, the manufacturer would lose revenue from the high-price group, making price discrimination unfeasible. Choice A and B are incorrect because successful price discrimination requires customers to have different elasticities of demand for the product and a downward-sloping demand curve.

Which of the Following Would Prevent a Pharmaceutical Manufacturer from Successfully