Explain the concept of tying in price discrimination.

Economics Price Discrimination Questions



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Explain the concept of tying in price discrimination.

Tying in price discrimination refers to a practice where a seller requires a buyer to purchase one product or service in order to obtain another product or service at a different price. This strategy is used to maximize profits by leveraging market power and creating barriers to entry for competitors. Tying can be either legal or illegal, depending on the specific circumstances and antitrust laws in place.