ACCA PM · Chapter 7 · Question 9 of 10
Which of the following conditions is necessary for a price discrimination strategy to be effective?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) The market can be divided into segments with different price elasticities, and customers cannot easily resell between segments
Explanation
Price discrimination charges different prices to different groups for the same product. It only works if segments have different sensitivities to price, if they can be kept apart so low-price buyers cannot resell to high-price buyers, and if the cost of separating them is less than the extra revenue.
More Pricing decisions MCQs
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- Q5In which of the following circumstances is a price skimming strategy most appropriate?