Question

In order for a firm to engage in price discrimination, it must be Your answer: able to separate consumers into different groups based on demand elasticities producing in the inelastic portion of its demand curve to raise its price and increase total revenue a price taker experiencing economies of scale in the relevant range of production employ facial-recognition software or GPS-tracking to learn customer behavior

Answer 1

able to separate consumers into different groups based on demand elasticities

Step-by-step explanation:

Price discrimination is when a seller sells the same product for different prices in different markets.

In price discrimination, the seller aims to eliminate consumer surplus by charging the highest possible price a consumer would be willing to pay.

Price discrimination can only be done by a price maker and not a price taker.

A supplier needs to know the elasticity of demand of its customers. Customers with an inelastic demand would be indifferent to higher prices while customers with an elastic demand would reduce demand If price was high. A supplier would charge a higher price to customers with an inelastic demand and a lower price to customers with an elastic demand.

I hope my answer helps.