If a firm is unable to distinguish which of its buyers has inelastic demand and which has a relatively elastic demand,then the firm will be unable to price discriminate because it will
A) not know how much of the product to offer for sale.
B) not know enough about its customer base to prevent resale.
C) not know which price to charge which customer.
D) not know how many of its customers will buy the product when it is offered for sale.
E) be unable to predict how much of its sales will be retained as profit.

Question

Quizplus · Accepted Answer

In order for a firm to price discriminate, it needs to be able to charge different prices to different groups of buyers based on their willingness to pay. If the firm cannot distinguish which buyers have inelastic demand (willing to pay higher prices) and which have relatively elastic demand (more price sensitive), it will not know which price to charge which customer, making price discrimination impossible.

If a Firm Is Unable to Distinguish Which of Its