Three Necessary Conditions Must Be Met Before a Seller Can

question 9

Multiple Choice

Three necessary conditions must be met before a seller can practice third-degree price discrimination. The conditions are: buyers must be separated into groups or submarkets according to their elasticities of demand, the seller must possess some degree of monopoly power, and

• A) the seller must prevent transfer of sales between the groups or submarkets.
• B) the seller must have "market dominance".
• C) the buyer must have profit maximization as a goal.
• D) the buyer must have variable costs that have to be recovered.

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Definitions:

Available-For-Sale

A classification of financial assets indicating that they are not held for trading or long-term investment purposes, and their value can be adjusted based on market valuations.

Realized Gain

The profit earned from the sale of an asset, which has been converted from an unrealized gain into cash or an equivalent.