To successfully price discriminate, a firm must ensure that there are no opportunities for arbitrage.

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Price discrimination involves charging different prices to different groups of customers based on their willingness to pay. To successfully price discriminate, a firm must ensure that customers in different groups do not resell the product to each other at a lower price, which is known as arbitrage. This can be achieved through various strategies such as product differentiation, bundling, and limiting resale options. By preventing arbitrage, the firm can capture more consumer surplus and increase profits.

To Successfully Price Discriminate, a Firm Must Ensure That There