4 Consider an industry where two producers sell a product which is differentiated only by quality, in

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4 Consider an industry where two producers sell a product which is differentiated only by quality, in a market where a share 0 < ψ < 1 of consumers are aware of the quality of the product being sold, but the other 1 − ψ consumers are unaware of the quality of each producer’s output. Producer H sells the highest-quality good, while producer L sells the lowest-quality good. The two producers compete in prices.

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Managerial Economics

ISBN: 9780415272889

1st Edition

Authors: Tim Fisher , Robert Waschik

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