In order to be a successful price discriminator, a provider must have a degree of market power (depicted by a downward-sloping demand curve) and meet what other condition(s)?

Question

Quizplus · Accepted Answer

A successful price discriminator must have market power and be able to categorize customers according to their willingness-to-pay. Additionally, opportunities for resale must be limited to prevent arbitrage and undercutting of prices. Customers do not necessarily need to be unaware of multiple prices being charged, but the provider must be able to control the price discrimination to avoid upsetting customers and damaging its reputation. Excess capacity can be helpful, but it is not a necessary condition for price discrimination to succeed. Therefore, both options A and B are correct.

In Order to Be a Successful Price Discriminator, a Provider