A firm's efforts to increase profit by price discrimination can be undermined by
A)arbitrage by buyers.
B)consumer ignorance.
C)differences in elasticity of demand.
D)seller market power.

Question

Quizplus · Accepted Answer

Arbitrage by buyers can undermine price discrimination because it allows consumers to buy a product at a lower price in one market and sell it at a higher price in another, thus equalizing prices and reducing the firm's ability to charge different prices to different consumers.

A Firm's Efforts to Increase Profit by Price Discrimination Can