Principles of Microeconomics / Unit 8 MIC 0726 short lesson, about 20 seconds
Three Conditions for Price Discrimination
Captions available
The idea
A firm can discriminate only if it is a price setter, can tell the groups apart, and can stop the low-price buyers from reselling to the high-price ones.
In practice
An airline can check identification; a grocer cannot tell a vegetarian from anyone else.
Where people slip
A perfectly competitive firm fails the first test outright. Discrimination is a symptom of market power.
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