Which one of the following is/are hold(s) true to successfully practice price discrimination?
A. The firm must be a pure monopoly
B. The firm must possess market power
C. It must be difficult for consumers in one market to sell to consumers in the other market
Choose the most appropriate answer from the options given below:

Correct option is B

Price discrimination is a pricing strategy where a firm charges different prices to different customers for the same product or service, based on willingness to pay. For price discrimination to be successful, the following conditions must hold:
1. The firm must possess market power (B) – Correct
· A company must have some degree of control over price-setting, meaning it cannot be a price taker like in perfect competition. This is common in monopolistic or oligopolistic markets.
2. It must be difficult for consumers in one market to sell to consumers in another (C) – Correct
· This prevents arbitrage, where buyers from the lower-priced segment resell to those in the higher-priced segment. If arbitrage is possible, price discrimination fails.
Why Option (A) is Incorrect?
· A firm does not need to be a pure monopoly to engage in price discrimination. Even companies in monopolistic competition or oligopolies can practice it (e.g., airlines, software firms, and pharmaceutical companies).
Why Option (D) is Incorrect?
· Market power (B) is also a necessary condition. Without it, firms cannot set different prices effectively.