A multinational streaming platform wants to implement third-degree price discrimination by charging different monthly subscription fees in different geographic regions.
Which of the following factors would make it difficult or impossible for the firm to implement this pricing strategy successfully?
Consumers have identical price elasticities of demand across all geographic regions.
The firm can effectively prevent consumers in one region from purchasing subscriptions through a Virtual Private Network (VPN).
The firm possesses sufficient market power to act as a price maker.
The administrative and transactional costs of setting up regional billing platforms are extremely low.
42 exam-style questions on OCR A Level Economics Market structures, covering Perfect competition, Monopoly, Monopolistic competition, Oligopoly, and Contestable markets. Each one has a worked solution and a mark scheme showing where the marks go.