In order for a firm to be able to price discriminate it must not be a price taker,there must be different demand from different groups of consumers,and there must be an ability to prevent resale.

Question

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In order to price discriminate, it is necessary for the firm to have some degree of market power, which means that it is not a price taker. Additionally, there must be identifiable groups of consumers with different levels of demand, so that the firm can charge different prices to each group. Finally, some form of market segmentation or ability to prevent resale must be in place to ensure that consumers cannot arbitrage between different price levels.

In Order for a Firm to Be Able to Price