What conditions should be met to practice price discrimination in a market?
To practice price discrimination, the following three conditions must hold:
1 . Monopoly Power. Price discrimination is possible only with monopoly or where members of a small group of firms follow identical pricing policies.
2 . Market Segregation. Price discrimination can only occur if the demand curves for markets, groups, or individuals are different.
3 . No Resale. For price discrimination to work, the person buying the product at a discount must have difficulty in reselling the product to customers being charged more.
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On June 2, 2017, Diamond Chemical Corporation’s 4.1 percent coupon bonds, with face values of $100, was sold for $95. This means that the yield on these bonds was
A. less than 4.1 percent. B. equal to 4.1 percent. C. equal to 95 percent of 4.1 percent. D. greater than 4.1 percent.
A regulated natural monopoly that must set price equal to average cost will
a. suffer an economic loss b. earn a net economic profit c. earn a normal profit d. earn so little that it will close in the long run e. earn no profits of any kind
The investment component of GDP refers to financial investment in stocks and bonds
a. True b. False Indicate whether the statement is true or false
In which of the following situations will both market clearing price and the equilibrium quantity increase?
A) an increase in demand with no change in supply B) an increase in supply with no change in demand C) a decrease in supply with no change in demand D) a decrease in demand with no change in supply