Question

(Consider This) Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. Which of the following conditions of price discrimination explain why this occurs?
A. The seller must have some monopoly power; that is, it must be able to set the product price.
B. The seller must be able to identify buyers by group characteristics such as age or income.
C. Groups must have different elasticities of demand for the product.
D.The items cannot be bought by people in the low-price group and transferred to members of the high-price group.

Answer 1

Answer:

The correct option is A

Explanation:

This occurs because since the seller can identify buyers by group characteristics, then he can ensure that children do not buy game tickets for adults in the first case. However for concession items, the seller does not have the power to prevent children from purchasing concession items for adults, hence charges the same prices for adults and children for concession items. This means that the seller has some sort of monopoly power.