Which of the following statements concerning price discrimination among consumers with different price elasticities is true?
A)Consumers are charged different prices because costs vary among consumers.
B)A firm cannot price-discriminate unless it can identify different consumer types.
C)It is possible for a competitive firm to price-discriminate.
D)Price discrimination occurs when some ethnic groups can get service and others cannot.
E)A firm can price-discriminate only if it has market power.

Question

Quizplus · Accepted Answer

Price discrimination requires a firm to be able to identify different consumer types and charge them different prices based on their differing price elasticities. Choices A and D do not accurately describe price discrimination, and while choice C is possible, price discrimination is more commonly associated with monopolies or firms with market power (as stated in choice E).

Which of the Following Statements Concerning Price Discrimination Among Consumers