Answer to Question #209312 in Economics for Ash

Question

Why is price discrimination not possible under perfect market conditions

Answer 1

1. First, the cause of price discrimination is not a monopoly, but the market power of the firm in the industry market;

 

2. Secondly, price discrimination is inherent only in imperfect markets and cannot be effectively used in conditions of perfect competition;

 

3. Third, price discrimination is a manifestation of the violation of the equivalence of exchange.