Question

Describe the cost conditions under which price discrimination is most likely? Why is price discrimination likely under these conditions?

Answer 1

Price discrimination is charging the same good with different prices for different people.

When the customers ignore the cost of the goods they buy without comparing between markets than price discrimination takes place as they are not caring about price.

If a good is produced by different firms which are identical in every way but the price may vary by changing names and labels so that person who willing to buy the good based on branding will pay high.

Elasticity of demand also one cost condition for price difference . As EOD vary from market to market and place to place. So they change prices based of EOD