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which of the following is not a necessary condition of price discrimination?

A. preventing the resale of the product

B. downward sloping demand curve

C. different consumer groups with different price elasticities of demand

D. having a constant marginal cost

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Kritika Krishnakumar
Kritika KrishnakumarLv10
31 Oct 2020

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Related questions

Which of the following conditions exist when price discrimination occurs? Choose one or more:
A. preventing the resale of the product or service.
B. selling the same good or services at different prices.
C. differentiating every customer's price elasticity of demand.
D. identifying at least three different groups of customers.
E. distinguishing groups of buyers with different price elasticities.
F. being a price taker.

39. Price discrimination is more likely in the case of services than in the case of goods because a. producers of goods usually do not face downward-sloping demand curves b. it is easier to distinguish customers with different elasticities of demand with respect to services than with goods. c. elasticities of demand vary more with services than with goods. d. it is more difficult to resell services.

Problem 11-04 (Algo): You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1's elasticity of demand is -6, while group 2's is -3. Your marginal cost of producing the product is $70.

a. Determine your optimal markups and prices under third-degree price discrimination. Instructions: Round your answers to two decimal places.

The markup for group 1:

Price for group 1:

The markup for group 2:

Price for group 2:

b. Which of the following are necessary conditions for third-degree price discrimination to enhance profits. Instructions: You may select more than one answer.

- At least one group has an elasticity of demand less than one in absolute value.

- We are able to prevent resale between the groups.

- There are two different groups with different (and identifiable) elasticities of demand.

- At least one group has an elasticity of demand greater than 1 in absolute value.

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