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Arbitrage
Buying in one market selling for more in another.
Price discrimination. And what is required for it to happen
- This is when a firm charges different prices not due to more expensive costs, but rather geographic demographic reasons.
1- Firm must posses market power.
2- Some consumers must have higher willingness to pay than others. And the company must know this.
3- Firm must be able to divide their market so that consumers cant easily buy cheap and resell.
Perfect Price Discrimination
- This is when each consumer pays as much as they are willing to.
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