Which one of the following is NOT the pre-requisite of price discrimination?
The availability of multiple close substitutes makes demand highly elastic and enables buyers to switch away if a seller attempts to charge a higher price, which prevents…
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Which one of the following is NOT the pre-requisite of price discrimination?
Answer and explanation
Correct answer B
The availability of multiple close substitutes makes demand highly elastic and enables buyers to switch away if a seller attempts to charge a higher price, which prevents price discrimination rather than serving as a prerequisite. Effective price discrimination requires monopoly power, segmented markets preventing resale, and differing price elasticities across sub-markets.
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UGC NET Commerce