-Bob is the only carpet installer in a small isolated town.The above figure shows the demand curves of two distinct groups of customers-residential and business.Bob is likely to price discriminate because
A) elasticities differ across markets.
B) the installation of carpets cannot be resold.
C) Bob can probably identify which consumers belong to which segment.
D) All of the above.

Question

-Bob is the only carpet installer in a small isolated town.The above figure shows the demand curves of two distinct groups of customers-residential and business.Bob is likely to price discriminate because
A) elasticities differ across markets. 
B) the installation of carpets cannot be resold. 
C) Bob can probably identify which consumers belong to which segment. 
D) All of the above.

Quizplus · Accepted Answer

Price discrimination is more feasible and profitable when the seller can segment markets based on different elasticities of demand, prevent resale between segments, and identify which consumers belong to which segment. All these conditions are met in the scenario described.

-Bob Is the Only Carpet Installer in a Small Isolated