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Eduncle posted an MCQ
October 13, 2019 • 17:56 pm 0 points
  • UGC NET
  • Commerce

Which one of the following is NOT the pre-requisite of price discrimination?

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    Eduncle Best Answer

    Conditions for Price Discrimination : Price discrimination is possible under the following conditions :
    1. The seller must have some control over the supply of his product. Such monopoly power is necessary to discriminate the price.
    2. The seller should be able to divide the market into at least two sub-markets (or more).
    3. The price-elasticity of the product must be different in different markets. Therefore, the monopolist can set a high price for those buyers whose price-elasticity of demand for the product is less than 1. In simple words, even if the seller increases the price, such buyers do not reduce the purchase volume.
    4. Buyers from the low-priced market should not be able to sell the product to buyers from the high-priced market.

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