What is a market force that can prevent firms from price discriminating
A)fluctuating resource prices
B)arbitrage
C)high fixed costs
D)perfect information

Question

Quizplus · Accepted Answer

Arbitrage is the market force that can prevent firms from price discriminating. It is the process of taking advantage of price differences in different markets by buying low and selling high. If a firm tries to charge different prices for the same product in different markets, arbitrageurs will buy the product where it is cheaper and sell it where it is more expensive, thereby equalizing the price. This will prevent a firm from successfully price discriminating.

What Is a Market Force That Can Prevent Firms from Price