Why is it important that a firm have market power if it wishes to engage in price discrimination?

What will be an ideal response?


If a firm does not have market power then it will face price competition from other firms in the industry if it tries to increase the price to one group of consumers. The competitors will charge a lower price to this group of consumers and the first firm will end up serving only the low price consumers. This will make it unprofitable to engage in price discrimination.

Economics

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In periods when GDP fails to grow at its normal rate, the actual unemployment rate will be ________ than the natural rate of unemployment

A) higher B) falling faster C) lower D) the same

Economics

Under perfect competition in the resource market, the marginal factor cost curve:

a. is positively sloped. b. is vertical. c. is negatively sloped. d. is horizontal. e. does not exist.

Economics

According to economists, entrepreneurship is a factor of production

Indicate whether the statement is true or false

Economics

One of the most controversial public policy issues in recent decades is the size and growth of the U.S. budget deficit and public debt. Discuss where we are, compared to other countries, and how we got here

Economics