Conditions for Price Discrimination
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Conditions for Price Discrimination: There are two main ideas in this section. The first is the set of conditions necessary for successful price discrimination: market power, exploitable difference in willingness-to-pay among consumers, and ability to prevent arbitrage. This material is easy for students to understand. The second item, that not all price differences involve price discrimination, is much more nuanced and subtle. It is worth walking through a few examples to help drive home the point that price discrimination is charging different prices for the same good, not for goods that are simply from the same seller.

