Which one of the following is an essential condition for a firm to successfully practice third-degree price discrimination?
The firm must operate in a perfectly competitive market.
The firm must be able to prevent arbitrage between different market segments.
The price elasticity of demand must be identical across all customer groups.
The marginal cost of producing the good must vary for each consumer group.
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.