Question

Price discrimination is possible when:

• A. The goods sold in the cheaper market cannot be resold in the dearer market.
• B. The market is divided into sub-market.
• C. Both (a) and (b)
• D. Elasticity of demand is same.

Answer 1

Answer: (C)

Both (a) and (b)

Price discrimination is the pricing strategy that charges different prices for the same product in different market to the customers. There are mainly 3 degrees of price discrimination. It was explained by Pigou. The causes of price discrimination are:

1. The goods sold in the cheaper market cannot be resold in the dearer market.
2. The market is divided into sub-market.