Which of the following is not a condition for a firm to engage in price discrimination?
A)Consumers are partitioned into two or more types, with one type having a more elastic demand than the other.
B)The firm has a means of identifying consumer types.
C)The consumers are assured to be sincere in telling their true natures.
D)There is no resale market for the good.

Question

Quizplus · Accepted Answer

All of the other conditions listed are necessary for a firm to engage in price discrimination. However, consumer sincerity in revealing their true natures is not a condition for price discrimination. The firm can still identify consumer types and set different prices based on their elasticity of demand even if some consumers are not sincere about their preferences.

Which of the Following Is Not a Condition for a Firm