Which of the following are necessary condition(s)for successful price discrimination? a.zero transactions cost
b.a perfectly competitive market structure
c.an imperfectly competitive market structure
d.at least two different markets with different price elasticities of demand
e.at least two different markets with different price elasticities of supply
A)a, b, and d only
B)c and d only
C)a, c, d and, e only
D)a and c only

Question

Quizplus · Accepted Answer

Price discrimination requires an imperfectly competitive market structure (c) because firms need some degree of market power to set different prices for different consumers or markets. It also requires at least two different markets with different price elasticities of demand (d) so that the firm can charge different prices based on the willingness and ability of consumers in each market to pay.

Which of the Following Are Necessary Condition(s)for Successful Price Discrimination