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“Price Discrimination” can be best exercised by the Seller in ________.
  • a)
    Oligopoly 
  • b)
    Monopoly 
  • c)
    Monopolistic competition
  • d)
    Perfect competition 
Correct answer is option 'B'. Can you explain this answer?
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“Price Discrimination” can be best exercised by the Seller...
Answer: B - MonopolyPrice discrimination is best exercised by the seller in a monopoly market structure. Here's why:1. Market Power:- In a monopoly, there is only one seller, which means the firm has significant market power and can control the price.- This allows the monopolist to charge different prices to different consumers based on their willingness to pay.2. Barriers to Entry:- Monopoly markets have high barriers to entry, which prevents new firms from entering the market and competing with the monopolist.- This allows the monopolist to exercise price discrimination without the fear of losing customers to competitors.3. Differentiated Demand:- In a monopoly, the seller can identify and segment consumers based on their demand and price elasticity.- This enables the monopolist to charge different prices to different consumer segments, maximizing profit.4. Limited Consumer Information:- In a monopoly, consumers may not have complete information about the product or its pricing.- This makes it easier for the monopolist to engage in price discrimination without customers being aware of the different prices charged.In contrast, oligopoly, monopolistic competition, and perfect competition market structures have multiple sellers, making it more difficult for any single firm to engage in price discrimination without facing competition or losing customers to other firms.
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“Price Discrimination” can be best exercised by the Seller in ________.a)Oligopolyb)Monopolyc)Monopolistic competitiond)Perfect competitionCorrect answer is option 'B'. Can you explain this answer?
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