Question

In order for a seller to successfully practice first-degree price discrimination, the seller must be able to: i. prevent resale of the good ii. compete with other sellers in the market for the good iii. charge consumers their maximum willingness to pay for units of the good?

1) i. prevent resale of the good
2) ii. compete with other sellers in the market for the good
3) iii. charge consumers their maximum willingness to pay for units of the good

Answer 1

To successfully practice first-degree price discrimination, a seller must prevent resale of the good, compete with other sellers in the market, and charge consumers their maximum willingness to pay.

Step-by-step explanation:

In order for a seller to successfully practice first-degree price discrimination, the seller must be able to:

1. Prevent resale of the good: This is important because if the goods can be resold, the seller will not be able to charge different prices to different customers.
2. Compete with other sellers in the market for the good: Competition can limit the seller's ability to charge different prices to different customers.
3. Charge consumers their maximum willingness to pay for units of the good: This is the key objective of first-degree price discrimination, where the seller aims to extract the maximum possible value from each customer.