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An oligopoly that engages in price discrimination will charge higher prices to customers with the most elastic demand.
Price Discrimination
A pricing strategy that charges customers different prices for the same product or service based on what the seller thinks they can get the customer to agree to.
Elastic Demand
A situation where the quantity demanded of a good or service changes significantly as its price changes.
Oligopoly
A market structure in which a small number of firms dominate the market, leading to limited competition.
- Acquire knowledge on the subject of price discrimination, including the specific conditions that facilitate it.
- Recognize the differences between several types of market structures, namely perfect competition, monopolistic competition, oligopoly, and monopoly.
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Learning Objectives
- Acquire knowledge on the subject of price discrimination, including the specific conditions that facilitate it.
- Recognize the differences between several types of market structures, namely perfect competition, monopolistic competition, oligopoly, and monopoly.
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