· Market power – the firm must have the ability to change the price (monopoly)
· Information – the firm has to be able to distinguish between customer’s willingness to pay. For example, a tram service would know that the Manchester to London morning route will have price inelastic demand.
· Limited ability to resell – customers cannot resell the product – this is because they would purchase the good at the lower price and sell at the higher price. When they sell at the higher prices, the supply will increase and the actual price level will end up falling.