For a monopolist to practise price discrimination, one necessary condition is that the product offered for sale must be:
A) high quality.
B) expensive.
C) cheap.
D) impossible or difficult to resell.

Question

Quizplus · Accepted Answer

The product offered for sale must be impossible or difficult to resell as in the case of tickets to an event or software licenses. This is because price discrimination relies on the monopolist being able to charge different prices to different groups of consumers based on their willingness and ability to pay, which requires the ability to distinguish between different buyers and prevent resale to those who are willing to pay a lower price. If the product can be easily resold, then the monopolist cannot prevent arbitrage between different buyers and cannot maintain the different price levels needed for price discrimination to be effective.

For a Monopolist to Practise Price Discrimination, One Necessary Condition