Our focus will primarily be on 3rd degree price discrimination,
but the insights we gain will be relevant to other forms of price
Two things are necessary in any market that is to successfully
practice price discrimination. These are:
Conditions equivalent to these are necessary for any form
of price discrimination. We'll consider some examples and see
how this works in different markets.
- The ability to identify which consumers have elastic and which
have inelastic demand
- The ability to prevent those consumers who buy at the lower prices
from reselling to those who would have to pay higher prices.
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