Examkin

Soru

Zorluk: KolayMonopoly: Price Discrimination Conditions, Types, and Effects

Which of the following is an essential condition required for a firm to successfully practice price discrimination?

  1. The firm must be able to prevent the resale of goods between sub-marketsCevap
  2. B
    The price elasticity of demand must be identical across all customer groups
  3. C
    The product must be homogeneous and sold in a perfectly competitive market
  4. D
    Marginal revenue must be negative in the high-price sub-market

Cevap

The firm must be able to prevent the resale of goods between sub-markets.
For price discrimination to work, the seller must be able to keep the market segregated. If buyers in the low-price segment can resell the product to buyers in the high-price segment, the higher price cannot be maintained.

Adım Adım Çözüm

1
Identify the basic prerequisites for price discrimination.
A firm requires monopoly power, market separation (prevention of seepage/resale), and differing price elasticities of demand.
Without market separation, buyers in the cheaper sub-market will resell to buyers in the expensive sub-market, eroding the price difference.
2
Evaluate the correct option against market principles.
Preventing resale ensures that buyers cannot engage in arbitrage between sub-markets.
Effective separation of sub-markets is an essential condition for sustaining price discrimination.

Anahtar Kavram

Conditions for Price Discrimination
Tahmini Süre:45s
Bu soruyu puanla

Konular

Monopoly: Price Discrimination Conditions, Types, and Effects

Bu konudan daha fazla soru