Why is it necessary for the seller to be able to keep customers from reselling the product in order for price discrimination to occur? There are many products for which you get a discount for purchasing large quantities. For instance, most liquor stores will provide a discount on wine if you purchase a case. Is this price discrimination? If so, what is to keep one customer from purchasing cases of wine and then reselling single bottles at a price above the case price but below the liquor store’s single-bottle price?

What could happen if a customer resells single bottles of wine purchased in bulk at a price between the case price and single-bottle price? Answer: It is necessary for a seller to prevent customers from reselling their products to maintain price discrimination because reselling would lead to market equilibrium, preventing the seller from charging different prices to different consumers. The discounts for large quantities of wine at the liquor store can be considered a form of price discrimination, although not a pure form, as the price difference is based on the quantity purchased rather than individual customer groups. If a customer resells single bottles of wine purchased in bulk at a price between the case price and single-bottle price, they would be undermining the store's price discrimination strategy and potentially engaging in unauthorized reselling. The store should implement measures to prevent reselling, such as requiring customers to show proof of intent or limiting the quantities purchased.