Which of the following statements is correct?
A) Any firm can price discriminate.
B) Only firms that sell high-priced products can price discriminate.
C) In order to price discriminate, a firm must sell a good or service that cannot be resold.
D) In order to price discriminate, the firms must sell a low-priced product.
E) Price discrimination is always illegal.

Question

Quizplus · Accepted Answer

For a firm to be able to price discriminate, it must sell a good or service that cannot be easily resold by the buyer. This is because price discrimination involves charging different prices to different groups of consumers, based on their willingness to pay. If the product can be resold, then the buyers who pay a lower price can resell it to the buyers who are willing to pay a higher price, thereby defeating the purpose of price discrimination.

Which of the Following Statements Is Correct