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When is Price Discrimination profitable? - Economics

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Question

When is Price Discrimination profitable?

Very Short Answer
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Solution

  1. When demand’s price elasticity varies between marketplaces, price discrimination can be profitable. MRA = MRB.
  2. It is possible when buyers are kept apart due to geographical distance.
  3. It can also occur when two markets are divided by tariff barriers.
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Chapter 14: Price Output Determination Under Monopoly - TEST QUESTIONS [Page 14.15]

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R. K. Lekhi and P. K. Dhar Economics [English] Class 12 ISC
Chapter 14 Price Output Determination Under Monopoly
TEST QUESTIONS | Q A. 6. | Page 14.15
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