Editing Price discrimination (section)

===Two necessary conditions for price discrimination===
There are two conditions that must be met if a price discrimination scheme is to work. First the seller must be able to identify market segments by their price elasticity of demand and second the sellers must be able to enforce the scheme.<ref>Samuelson & Marks, Managerial Economics 4th ed. (Wiley 2003)</ref> For example, airlines routinely engage in price discrimination by charging high prices for customers with relatively inelastic demand – business travelers – and discount prices for tourist who have relatively elastic demand.  The airlines enforce the scheme by enforcing a no resale policy on the tickets preventing a tourist from buying a ticket at a discounted price and selling it to a business traveler ([[arbitrage]]).  Airlines must also prevent business travelers from directly buying discount tickets. Airlines accomplish this by imposing advance ticketing requirements or minimum stay requirements{{snd}}conditions that would be difficult for the average business traveler to meet.<ref>Samuelson & Marks, Managerial Economics 4th ed. (Wiley 2003) Airlines typically attempt to maximize revenue rather than profits because airlines variable costs are small. Thus airlines use pricing strategies designed to fill seats rather than equate marginal revenue and marginal costs.</ref><ref name="xu2">{{cite journal |last1=Xu |first1=Man |last2=Tang |first2=Wansheng |last3=Zhou |first3=Chi |date=1 February 2020 |title=Price discrimination based on purchase behavior and service cost in competitive channels |url=https://doi.org/10.1007/s00500-019-03760-7 |journal=Soft Computing |language=en |volume=24 |issue=4 |pages=2567–2588 |doi=10.1007/s00500-019-03760-7 |issn=1433-7479 |s2cid=67905768}}</ref><ref name="danzon2" />