Textbook publishers often sell the same or essentially identical books in different countries for different prices. Is this an effective form of group price discrimination? A. Yes, because the textbooks are actually different since they have a different cover and an "international" label on them. B. Yes, because the first sale doctrine does not apply to overseas sales. C. No, because people are allowed to buy the books in one country and sell them in another, making money on the arbitrage opportunity. D. No, because poor foreign students can't afford the books.

Question

Business

Carleigh Livingston

10 March, 13:19

Textbook publishers often sell the same or essentially identical books in different countries for different prices. Is this an effective form of group price discrimination? A. Yes, because the textbooks are actually different since they have a different cover and an "international" label on them. B. Yes, because the first sale doctrine does not apply to overseas sales. C. No, because people are allowed to buy the books in one country and sell them in another, making money on the arbitrage opportunity. D. No, because poor foreign students can't afford the books.

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Answers (1)

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Lucian Lam · Answer 1

The correct answer is C

Explanation:

For an effective form of group price discrimination to occur, certain factors must be extant:

the firm/business should have the ability to influence the prices of its products in the market regardless of competition or other forces; the firm must have market intelligence about the demand for its products, and the firm must have the ability to prevent the resale of the product.

When, however, the firm cannot prevent the purchase of the book in one country and the re-sale of the same in another, the price discrimination is said to be ineffective.

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