When is price discrimination possible?

1.	When is price discrimination possible?
Answer» Price discrimination is possible in the following ways: Price discrimination by a seller is possible when it is not possible to transfer any unit of the product from one market to another. Secondly, price discrimination can occur if it is not possible for the buyers in the dearer market to transfer themselves to cheaper market to buy the product or service at a lower price. In view of the above two essential conditions, price discrimination is possible in the following cases: (a) The nature of commodity or service is such that it cannot be transferred from one market to another. (b) There exist long distances or tariff barriers between the two markets in which price discrimination is practiced. (c) There is a legal sanction for price discrimination. (d) There are preferences or prejudices on part of some buyers to buy products at higher prices. (e) Ignorance and laziness on the part of buyers.

Answer»

Price discrimination is possible in the following ways:

Price discrimination by a seller is possible when it is not possible to transfer any unit of the product from one market to another.
Secondly, price discrimination can occur if it is not possible for the buyers in the dearer market to transfer themselves to cheaper market to buy the product or service at a lower price.

In view of the above two essential conditions, price discrimination is possible in the following cases:

(a) The nature of commodity or service is such that it cannot be transferred from one market to another.
(b) There exist long distances or tariff barriers between the two markets in which price discrimination is practiced.
(c) There is a legal sanction for price discrimination.
(d) There are preferences or prejudices on part of some buyers to buy products at higher prices.
(e) Ignorance and laziness on the part of buyers.

When is price discrimination possible?

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