Which of the following undermines a firm's ability to engage in price discrimination?
A)The seller's market power
B)The inability to prevent resale of the product from one market segment to another
C)Buyers having different elasticities of demand for the product
D)The seller's ability to segment the total market

Question

Quizplus · Accepted Answer

Price discrimination relies on the ability to charge different prices to different market segments based on their willingness to pay. If the firm cannot prevent resale of the product from one market segment to another, it becomes difficult to charge different prices as buyers from different segments can purchase the product at a lower price from another segment. This undermines the ability of the firm to engage in price discrimination. Options A, C, and D do not directly undermine the firm's ability to engage in price discrimination. In fact, a firm with higher market power, diverse elasticities of demand, and the ability to segment the market can have more opportunities for price discrimination.

Which of the Following Undermines a Firm's Ability to Engage