Learning Path
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A
A → D → B → C
B
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C
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D
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Understanding the Answer
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Answer
To implement price discrimination effectively, the first step is to identify different consumer segments based on their willingness to pay. This means figuring out who values the product more and who values it less. Next, you need to analyze the elasticity of demand for the product, which helps you understand how sensitive consumers are to price changes. After that, you can set different prices for each identified segment, ensuring that each group pays what they are willing to pay. Finally, it's important to ensure that reselling between consumers is not feasible, so that higher-paying customers cannot sell to lower-paying ones, keeping the price structure intact.
Detailed Explanation
First, you need to identify different groups of consumers based on how much they are willing to pay. Other options are incorrect because This option suggests starting with setting prices; This option starts with analyzing demand.
Key Concepts
Price Discrimination
Consumer Segmentation
Demand Elasticity
Topic
Understanding Price Discrimination
Difficulty
medium level question
Cognitive Level
understand
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