A digital textbook publisher holds a monopoly on a specialized medical database and wants to implement third-degree price discrimination by charging different annual licensing fees to corporate research firms and academic institutions.
Which of the following conditions would prevent the publisher from successfully implementing this third-degree price discrimination strategy?
The publisher can cheaply and effectively verify the academic status of any subscriber before granting the discounted rate.
Corporate research firms and academic institutions have identical price elasticities of demand for the database at any given price.
The transaction costs associated with setting up separate secure portals for corporate and academic users are extremely low.
The database contains highly proprietary data, ensuring the publisher remains a price maker with significant market power.
