Asked by Simply Eleni on May 23, 2024
Verified
Which of the following is not a precondition for price discrimination?
A) The commodity involved must be a durable good.
B) The good or service cannot be profitably resold by original buyers.
C) The seller must be able to segment the market, that is, to distinguish buyers with different elasticities of demand.
D) The seller must possess some degree of monopoly power.
Price Discrimination
A pricing strategy where a seller charges different prices for the same product or service to different consumers, based on their willingness to pay.
Durable Good
A consumer good with an expected life (use) of three or more years.
- Ascertain the essential conditions for efficient price discrimination and examine its consequences on economic prosperity and business profitability.
Verified Answer
LD
Lyanne DaisyMay 29, 2024
Final Answer :
A
Explanation :
Price discrimination does not require the commodity to be a durable good. It primarily depends on the seller's ability to segment the market, prevent resale, and possess some degree of market power.
Learning Objectives
- Ascertain the essential conditions for efficient price discrimination and examine its consequences on economic prosperity and business profitability.