In which of the following situations will a firm be unable to price discriminate?
A)when different groups of consumers can be separated based on an observable characteristic
B)when consumers can communicate price information, but are unable to trade
C)when there are large differences in the willingness to pay of different consumers
D)when trading of the good is possible between consumers

Question

Quizplus · Accepted Answer

Price discrimination requires that different consumers are charged different prices for the same good or service. In option D, trading of the good between consumers means that they can potentially sell the good to each other at the lower price, undermining the firm's ability to discriminate. Therefore, the firm will be unable to price discriminate in this situation.

In Which of the Following Situations Will a Firm Be