A software monopolist wishes to practice third-degree price discrimination by charging £800 to corporate clients and £80 to university students for the same software license. Which of the following, if true, would most directly prevent the firm from successfully implementing this pricing strategy?
The marginal cost of delivering the digital software license is identical and near-zero for both corporate clients and university students.
Corporate clients have a significantly lower price elasticity of demand for the software than university students.
An unregulated online secondary market allows students to easily transfer and resell their activation codes to corporate clients.
The monopolist is legally required to publish its full pricing structure openly on its corporate website.
92 exam-style questions on Edexcel A A Level Economics 3.4 Market structures, covering 3.4.1 Efficiency, 3.4.2 Perfect competition, 3.4.3 Monopolistic competition, 3.4.4 Oligopoly, 3.4.5 Monopoly, 3.4.6 Monopsony, and 3.4.7 Contestability. Each one has a worked solution and a mark scheme showing where the marks go.