Price discrimination can be an effective way to increase a firm's profit if the price elasticity of demand is the same across all buyers the firm serves.

Question

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Price discrimination is most effective when a firm can identify different segments of customers with different price sensitivities. If the price elasticity of demand is the same across all buyers, then price discrimination may not be as effective, as the firm cannot charge different prices to different segments of customers without experiencing a decrease in demand from all buyers.

Price Discrimination Can Be an Effective Way to Increase a Firm's