GCEEconomicsMarket Structures2023

Price discrimination by a monopolist is possible only when

Athe product can be resold easily between different markets
Bthe elasticity of demand is the same in all markets
Cmarkets can be separated and demand elasticities differ across marketsCORRECT
Dthe monopolist operates at the minimum point of the average cost curve
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Why the answer is C, and why the others tempt you.
For price discrimination to be profitable and feasible, the monopolist must be able to separate markets (prevent resale between them) and the price elasticity of demand must differ across those markets. If elasticities were equal, the profit-maximising prices would be the same, making discrimination pointless. If resale were possible, buyers in the cheap market would resell to buyers in the expensive market, undermining the price difference.
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