Which of the Following Is Not a Precondition for Price

question 204

Multiple Choice

Which of the following is not a precondition for price discrimination?

• A) The commodity involved must be a durable good.
• B) The good or service cannot be profitably resold by original buyers.
• C) The seller must be able to segment the market, that is, to distinguish buyers with different elasticities of demand.
• D) The seller must possess some degree of monopoly power.

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and the actual price they pay.

Comparative Advantage

Comparative advantage is the ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, underpinning international trade theory.

International Trade

The exchange of goods, services, and capital across international borders, driven by the concept of comparative advantage.

Tariff

A tax imposed on imported goods and services to increase their price and reduce competition with domestic products.