Question

Which of the following conditions must exist for price discrimination to occur? Choose one or more:

A. identifying at least three different groups of customers
B. selling the same good or service at different prices
C. distinguishing groups of buyers with different price elasticities
D. preventing resale of the product or service
E. being a price taker
F. differentiating every customer's price elasticity of demand

Answer 1

B, C, D

Step-by-step explanation:

Price discrimination is a situation in which the seller of a particular product or service is able to offer different prices to different customers for the same product or service and there exists barriers that prevent the customers from being able to move the product or service from a region of low price to resell in a region where they can charge higher prices than they bought it.

Hence for price discrimination to be successfully implemented, the following must be obtainable;

1. Ability to charge different prices for the same good or service

2. Identify different classes of customers for the goods or service.

3. Barriers must exist to prevent resale of goods or service

I hope this helps you understand the concept of price discrimination better.