Which of the following features is not needed for price discrimination using a t
ID: 2494932 • Letter: W
Question
Which of the following features is not needed for price discrimination using a two-part tariff to work?
The firm must have market power.
The firm must be able to prevent resale.
The firm must learn about its customers' demands before purchases are made.
The firm's customers must have different demand curves.
The firm must have market power.
The firm must be able to prevent resale.
The firm must learn about its customers' demands before purchases are made.
The firm's customers must have different demand curves.
Explanation / Answer
The firm must have market power. - not a feature commonly seen or available in competitive market. This is a feature nomally seen in monopolistic market having giving producer the choice of no proce disrimination by controlling supply.
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