Despite the gain from higher profits,firms are not always able to price discriminate because
A) they are unable to partition their customers into distinct groups.
B) it is always illegal to price discriminate in the United States.
C) they already hold a large degree of market power.
D) they already provide their goods at the lowest-possible prices.
E) they can easily determine each customer's reservation price.

Question

Quizplus · Accepted Answer

In order to engage in price discrimination, firms must be able to identify distinct groups of customers with different willingness to pay. If they are unable to do so, they cannot effectively price discriminate.

Despite the Gain from Higher Profits,firms Are Not Always Able