Question

Which of the following is not a necessary condition for price discrimination to hold? The seller must be a price searcher. The seller must be able to distinguish between customers willing to pay different prices. It must cost the seller more to service some customers than others. Reselling the product must be extremely costly or must not be possible

Answer 1

Answer: Option A

Explanation: Price discrimination is a feature of monopoly firms. Monopoly firms are those firms which provides such goods or services in the market for which no close substitutes are available. As there are no other competitors monopoly firms are free from the burden of adjusting its prices according to others.

Thus to make price discrimination in market the firm has to be a price maker and not price searcher.