Economics (AS & A Level) · Oct / Nov 2023 · Paper 33 · Question 7
9708Differing objectives and policies of firms
Which condition is necessary for a firm to practise third degree price discrimination effectively?
- AAll consumers and producers must be in the same geographical location.
- BCustomers must be divided into separate markets for the same product.
- CEach separate market must have identical price elasticities of demand.
- DPrice undercutting is required to enter a monopolistic market.
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Correct answer: B. Customers must be divided into separate markets for the same product.
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