What are the necessary conditions if price is discrimination is to succeed?

Price discrimination is the process (practice) of selling the same commodity to different consumers at different prices by the same seller in a given period of time, for reasons not associated with costs. For example prices of entertainment tickets at different costs for public and students or children and adults.

• The commodity should not have close substitute.
• Businesses must prevent resale. Prevention of re-sale could be enforced in many different ways. For example students can only receive student discounts with a legitimate student ID, children can easily be identified from adults.
• The market in question must be geographically distant /spatially separated in case of seats for football or entertainment such that it is easy for monopolist to charge different prices in the different market places or transfer of goods from one market to another is difficult
• There should be different elasticity of demand in the different markets.
• Ignorance among customers about other markets
• The seller or producer must be a monopolist or the market must be imperfect.
• Personal services that can be resold or transferred e.g. medical Doctor, teacher, entertainment etc.
• Product differentiation; artificial differences made on similar products by a way of branding, trademarks.
• Low transport costs also lead to monopoly power in that goods can be transferred from one market to another without affecting their prices.
• No government interference