To practice price discrimination,a firm:
A)must be facing a relatively elastic demand curve.
B)must have customers with different elasticities of demand.
C)must not be able to distinguish between customers based on elasticities of demand.
D)must not be able to prevent resale of the product.
E)must be a price taker.

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different groups of customers based on their different elasticities of demand. Therefore, the firm must have customers with different elasticities of demand to practice price discrimination.

To Practice Price Discrimination,a Firm