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What three conditions are required for effective price discrimination?

A
  • The firm must be a price taker with market power.
  • Consumers must have identical price elasticities of demand.
  • There must be no resale between groups.
B
  • The firm must be a price maker with market power.
  • Consumers must have different price elasticities of demand.
  • There must be resale between groups.
C
  • The firm must be a price taker without market power.
  • Consumers must have different price elasticities of demand.
  • There must be resale between groups.
D
  • The firm must be a price maker with market power.
  • Consumers must have different price elasticities of demand.
  • There must be no resale between groups.

Card 1 of 21

7.8.3 price discrimination – first, second and third degree Flashcards

  1. Intl A Level
  2. /Economics
  3. /7.8.3 price discrimination – first, second and third degree

21 flashcards on CIE Intl A Level Economics 7.8.3 price discrimination – first, second and third degree: the key terms and definitions you need to recall.

Flashcards