A key requirement for producers to be able to engage in price discrimination is to:
A) Prevent arbitrage.
B) Raise prices to cover costs.
C) Raise prices to increase profit margins.
D) Charge the same price to different groups of customers with different levels of price sensitivity.

Question

Quizplus · Accepted Answer

Preventing arbitrage is essential for price discrimination because it ensures that consumers who are charged lower prices cannot resell the product or service to those who are charged higher prices, thereby maintaining the price differences across different customer segments.

A Key Requirement for Producers to Be Able to Engage