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saplinglearning.com Amazon.com Grades for Kaya DeRobbio: ECON 402.05: Princl Jump to. 21/2017 10:00 AM 4 39/50 Gras Print Calculator Penodic Table 20 ot 21 Map Sapling Learning Three conditions that enable price discrimination are (A) sellers separate consumers according to their price elasticity of demand, and (C) sellers must be able to prevent price have market Given the f mination in each case? Fro ire snin ofpay ahighe ace tor t earnas tuam people with a certain blood A local gas station in a large city hires an analyst who discovers that individuals who drive red cars are much less price sensitive than other gasoline consumers The small town of Microville has a flourishing secondhand market through Jonslist, a local website that allows private parties to sell pre-owned products to one another, Everyone in Microville realizes that Ed's newly invented and patented hairbrush is essential for their happiness. Ed realizes that shoppers who only have time to purchase his invention on Thursday are willing to pay more than double that of the typical shopper Ext d) Previous ®Give up & View Solution e' check Answer 0Neat us help prvacy policy terms of use contact 17
Explanation / Answer
Price discrimination is a practice of charging different prices to differnet customers of same product.
case A : Door to door vaccum seller knows the bolld type of people who give more price but this blodd type can not be visible. The seller canot ask his customers about their blood type hence differentiating customers would be impossible. Thus, inability to separate consumers on basis of elasticity of demand will prevent price discrimination.
case B: As the gas station is in large city. there would be other gas stations as well thus the local station does not have market power. The abscence of market power will prevent price discrimination.
case C : There is possibility of reselling. Hence the people who buy brush on non thrusdays, can resell in second market to people who go to thursday. Thus absence of arbitrage prevention will limit price discrimination.
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