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1. Nature of commodity -some businesses which offer personal services such as nursing are particularly suitable for price discrimination.
2. Government policies - government may give a firm license to produce a certain commodity alone and the firm can practice price discrimination easily.
3. Purchase of special orders - seller may charge different prices since the customers cannot readily compare the price charged to different customers.
4. Cases of imperfect competition - price discrimination can only be practised where there is imperfect competition because under the conditions of perfect competition firms are price takers.
5. Separate sub markets - the monopolist should be able to keep the various sub markets separate so that it is not easy to transfer units of the commodity from one sub market to the other whereby the distance between the two sub markets is large.
Jonmhumble answered the question on October 22, 2017 at 18:05
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