Question

Textbook publishers often sell the same or essentially identical books in different countries for different prices. Is this an effective form of group price​ discrimination? A. ​Yes, because the textbooks are actually different since they have a different cover and an​ "international" label on them. B. ​Yes, because the first sale doctrine does not apply to overseas sales. C. ​No, because people are allowed to buy the books in one country and sell them in​ another, making money on the arbitrage opportunity. D. ​No, because poor foreign students​ can't afford the books.

Answer 1

The correct answer is C

Step-by-step explanation:

For an effective form of group price discrimination to occur, certain factors must be extant:

• the firm/business should have the ability to influence the prices of its products in the market regardless of competition or other forces;
• the firm must have market intelligence about the demand for its products, and
• the firm must have the ability to prevent the resale of the product.

When, however, the firm cannot prevent the purchase of the book in one country and the re-sale of the same in another, the price discrimination is said to be ineffective.

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