One requirement for a firm pursuing a price-discrimination strategy is the ability to segment the market for its product.This means that
A)the firm must set different prices for different regions where the product is sold.
B)the firm must be willing to offer price discounts for senior citizens and children.
C)the firm must be able to divide the market in a way that makes arbitrage impossible.
D)the firm must choose a marketing strategy that appeals to different segments of the economy.

Question

Quizplus · Accepted Answer

The ability to segment the market for its product is necessary for a firm pursuing a price-discrimination strategy. This means that the firm must be able to divide the market in a way that makes it difficult or impossible for buyers to resell products from one segment to another at a profit, also known as arbitrage. This ensures that each segment of the market pays the price the firm has set for that segment, maximizing profits for the firm. Setting different prices for different regions (A) or offering price discounts (B) may be part of a price-discrimination strategy, but they are not the primary requirement. Choosing a marketing strategy that appeals to different segments of the economy (D) is also not the primary requirement, as it does not necessarily involve setting different prices for each segment.

One Requirement for a Firm Pursuing a Price-Discrimination Strategy Is