GK
BUSINESS ECONOMICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Which of the following is not a condition of successful price discrimination
|
|
Seller should be an MNC
|
|
|
Location of markets at distinct place
|
|
|
Consumers ignorance and prejudice
|
|
|
Different elasticity of demand for different customer
|
Explanation:
Detailed explanation-1: -The correct answer is d. The seller must have zero fixed costs. A seller has to incur fixed costs irrespective of the quantity produced or sold. A seller cannot have zero fixed costs and hence, it is not a condition for price discrimination.
Detailed explanation-2: -A key condition for price discrimination to occur is the identification of different market segments. If this is possible different groups have different price elasticities of demand. Therefore the firm can charge different prices depending on the consumers sensitivity to price changes.
There is 1 question to complete.