Map of italy naples and pompeii for price discrimination 663 There are three requirements for a firm to be able to price discriminate: 1. It must have market power”the ability to set price 2. It must have information about how willingness to pay varies across consumers 3. It must be able to prevent re-sale of its output from those who are charged a low price to those who would be charged a high price (that is, it must prevent ARBITRAGE). If a monopolist can identify groups of consumers with varying willingness to pay, price discrimination can allow it to greatly increase its profit. Interestingly, it may also lead to lower deadweight loss (i.e. Map of italy naples and pompeii 2016.