A necessary condition for successful price discrimination is
A)The seller must possess market power.
B)The buyer must possess market power.
C)Transactions costs must be zero.
D)Buyers must have identical inelastic demands.

Question

Quizplus · Accepted Answer

Price discrimination allows a seller to charge different prices to different buyers for the same product. To successfully implement price discrimination, the seller must possess market power, which means that they have the ability to influence the market price by controlling the supply of the product. Without market power, the seller may not be able to charge different prices to different buyers, as they would be forced to sell at the prevailing market price.

A Necessary Condition for Successful Price Discrimination Is