Question:
What Conditions must be in Place for Firms to Price Discriminate?
Author: eric_galvaoAnswer:
-Seller must have Price Making Power - so has to be Barriers to Entry. Monopolies and Oligopolies can do this -Firm must split Groups of Consumers who have Different Price Elasticises of Demand. More Groups that can be Divided = Better the Gains -Firm can’t allow Seepage ie Consumers can’t buy the Product at a Low Price and, themselves, sell it at a Higher Price that could’be been charged More
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