Which of the following is necessary in order for a firm to successfully practice price discrimination?
A)The firm must practice product differentiation.
B)The demand for the firm's product is inelastic.
C)The firm must be able to segment the market for the product.
D)The firm's transactions costs must be zero.

Question

Quizplus · Accepted Answer

Price discrimination requires the ability to identify different groups of customers with different price elasticities of demand and adjust the price accordingly. This segmentation can be based on factors such as age, income, geographic location, or other characteristics. Product differentiation may be helpful but is not necessary for price discrimination. Inelastic demand may make price discrimination more profitable, but it is not a necessary condition. Zero transaction costs are unlikely and not required for price discrimination.

Which of the Following Is Necessary in Order for a Firm