Answer to Question #226286 in Macroeconomics for lingeh

Question

why is price discrimination not possible ubder perfect market conditions?

Answer 1

Price discrimination: Price discrimination is a strategy of charging different prices for the similar goods in different markets. Generally, it is seen in the monopoly market where the seller has full control over price.

Price discrimination is not possible in the perfect competition or perfectly competitive market because the sellers have no control over price. Each and every seller sell identical good. Also, the buyers and sellers have full information about the market price. So if a seller tries to charge different prices in different markets then the buyers will buy from another seller who is selling at the market price rather than buying at discriminated prices. So price discrimination can not be done in perfect market conditions.