DP Economics Questionbank
Price discrimination
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Description
[N/A]Directly related questions
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21M.3.HL.TZ0.3h.i:
State two conditions necessary for price discrimination to take place.
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21M.3.HL.TZ0.3h.ii:
Using a diagram (or diagrams), explain why a profit maximizing firm might charge a higher price in one market than in another.
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18N.3.HL.TZ0.1g:
Firm B conducted a market survey and found out that the price elasticity of demand for its brand of tea is 0.8 among urban customers, whereas it is 1.2 among customers in rural areas. The sales director said “This information could help Firm B to raise its revenue, by trying to separate the two markets, provided that certain conditions are satisfied”. Explain this statement.
Sub sections and their related questions
Necessary conditions for the practice of price discrimination
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18N.3.HL.TZ0.1g:
Firm B conducted a market survey and found out that the price elasticity of demand for its brand of tea is 0.8 among urban customers, whereas it is 1.2 among customers in rural areas. The sales director said “This information could help Firm B to raise its revenue, by trying to separate the two markets, provided that certain conditions are satisfied”. Explain this statement.
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21M.3.HL.TZ0.3h.i:
State two conditions necessary for price discrimination to take place.
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21M.3.HL.TZ0.3h.ii:
Using a diagram (or diagrams), explain why a profit maximizing firm might charge a higher price in one market than in another.
