Next to its plant, a manufacturer of dinner plates has an outlet store that sells first- quality plates (perfect plates) and second-quality plates (slightly blemished plates). The outlet store sells a relatively large share of second-quality plates (or seconds). At its regular retail stores (located all over the world), the firm sells many more first-quality plates than second-quality plates. Why? (Assume that consumers' tastes with respect to plates are the same everywhere, the income effects are very small, and there is a cost, s, of shipping each plate from the factory to the firm's other stores.)

a. Determine how the relative prices of plates differ between the two types of stores.

b. Use the relative price difference to explain why relatively more seconds are bought at the factory outlet.

c. think of other real-world phenomena which behave like this?