Suppose a firm knows that potential customers of its product belong to different groups but cannot identify their membership in a group until after a transaction has taken place. In this situation, it is not possible for the firm to engage in price discrimination.

Question

Quizplus · Accepted Answer

The firm can still engage in price discrimination after the transaction by using strategies such as offering rebates, coupons, or loyalty programs that effectively differentiate prices among groups based on their post-purchase behavior or characteristics revealed after the sale.

Suppose a Firm Knows That Potential Customers of Its Product