Economics (AS & A Level) · Oct / Nov 2023 · Paper 32 · Question 7
9708Differing objectives and policies of firms
A firm operating in the airline industry uses third degree price discrimination. Which condition is most likely to allow this to happen?
- AConsumers are able to buy cheaply and then sell the product at a higher price.
- BPrice elasticity of demand is the same for all consumers in the market.
- CThe firm faces a perfectly elastic demand curve.
- DThe firm is able to keep the different market segments separate.
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Correct answer: D. The firm is able to keep the different market segments separate.
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