Which of the following conditions that must be satisfied by a successful price d

Question

Which of the following conditions that must be satisfied by a successful price discrimination scheme<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />?<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

a.       The seller must have market power

b.      The seller must be able to identify different customer groups with different demand elasticities

c.       The seller must be able to prevent arbitrage between the two groups

d.      All of the above

Explanation / Answer

d.      All of the above

As obny hten will the firm be able to influence price and differentiate among the target consumers for the different price range and effectivley stop them from trading accross the 2 groups.

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