5. Conditions for price discrimination Price discrimination is the practice of charging different prices for the same product that are not justified by cost differences. Evaluate the following statement: "Price discrimination requires market segmentation." False, because the monopolist can never charge anyone their maximum willingness to pay anyway False, because the monopolist does not need to know people's willingness to pay for its goods None of these choices True, because the monopolist needs to know the willingness to pay of different groups of consumers

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Price Discrimination

Price discrimination or differential pricing is based on the principle that the seller will charge the buyer a price based on the buyer’s ability and willingness to pay for the product rather than applying uniform pricing for all.