Statement I.Price discrimination is basically a mechanism for rationing scarce goods and services.
Statement II.The price discriminator must be able to prevent buyers from reselling the product (i.e. ,stop those who would buy at a low price from selling to those who would otherwise buy at a higher price).

Question

Quizplus · Accepted Answer

Statement I is true because price discrimination allows scarce goods and services to be allocated efficiently to those who value them the most. Statement II is also true because price discrimination requires the ability to prevent buyers from reselling the product to others who are willing to pay a higher price. Without this ability, the price discriminator would not be able to fully capture the consumer surplus created by the price discrimination strategy.