Answer to Question #59318 in Economics for Austin

Question

Many firms do not price discriminate. What can prevent some firms being able to do price discrimination?

Answer 1

Many firms do not price discriminate. In perfectly competitive markets price discrimination is impossible, because all firms are price-takers and can't influence on the price. In monopolistically competitive and monopolistic markets the existence of price discrimination is controlled and blocked by anti thrust laws, so price discrimination is possible only in some cases. All of mentioned above can prevent some firms being able to do price discrimination.