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The correct statement is: Must be able to supply the product to consumers at different per unit costs. Effective price discrimination involves charging different prices
The correct statement is: "Must be able to supply the product to consumers at different per unit costs." Effective price discrimination involves charging different prices to different groups of consumers based on their willingness to pay. For price discrimination to work, the seller must have the ability to segment the market and charge different prices to different groups of consumers. The ability to supply the product to consumers at different per unit costs enables the seller to maximize profits by charging higher prices to consumers with a higher willingness to pay while still covering costs for consumers with a lower willingness to pay. The other options do not accurately describe the conditions necessary for effective price discrimination: Being a pure monopolist is not a requirement for effective price discrimination. Price discrimination can occur in markets with varying degrees of competition. While preventing resale among consumers can aid in price discrimination, it is not a strict requirement. Price discrimination can still occur even if resale is possible, although it may be more challenging to implement. Having large economies of scale and control over a key natural resource may provide advantages but are not necessary conditions for price discrimination. Facing a horizontal demand curve for its product is not a requirement for effective price discrimination. Price discrimination can occur in markets with different demand curves, including downward-sloping
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