Price discrimination is possible only if
A)Economies of scale exist
B)Markets can be segregated
C)Each person in the market has the same elasticity of demand
D)Prices are kept secret so those paying the high price do not know that others paid less

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different groups of customers. This can only be done if markets can be segregated, meaning that different groups of customers have different willingness to pay or different levels of demand. If markets cannot be segregated, then everyone in the market would have to be charged the same price, making price discrimination impossible. Economies of scale may make it easier to implement price discrimination, but they are not a necessary condition. Similarly, the elasticity of demand may differ among customers, but this is not a sufficient condition for price discrimination to occur. Keeping prices secret may help firms to prevent arbitrage or price comparisons, but it is not a necessary condition for price discrimination.

Price Discrimination Is Possible Only If