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Question 21M.3.HL.TZ0.3h.i

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Date May 2021 Marks available [Maximum mark: 2] Reference code 21M.3.HL.TZ0.3h.i
Level HL Paper 3 Time zone TZ0
Command term State Question number h.i Adapted from N/A
h.i.
[Maximum mark: 2]
21M.3.HL.TZ0.3h.i

One firm in the widget industry uses the practice of price discrimination, charging a lower price to one group of consumers than to another group, even though there is no difference in the cost of supplying to each group.

(h.i)

State two conditions necessary for price discrimination to take place.

[2]

Markscheme

Award [1] for each valid condition stated.

Conditions may include:

  • the firm must possess some degree of market power
  • there must be groups of consumers with differing price elasticities of demand for the product
  • the firm must be able to prevent resale of the product from one market segment to others / separate the groups.

NB A statement that markets are differentiated/divided is not sufficient for [1].

Examiners report

Generally very well-answered. 

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