Incorporating Quality-Differentiated Demand into the Undergraduate Microeconomics Core

This paper addresses quality-related aspects of consumer choice in undergraduate microeconomics and is divided into two sections. The first develops a conceptual framework underlying a linear demand structure for quality-differentiated goods. The second section incorporates a quality-differentiated demand structure into a conventional undergraduate critique of market efficiency in responding to consumer choice. A competitive market is shown to produce the optimal quality mix of a quality-differentiated good, while a monopolist is biased in favour of higher quality and a potentially suboptimal quality mix.

Adams CF. Incorporating Quality-Differentiated Demand into the Undergraduate Microeconomics Core. The American Economist. May 2022. doi:10.1177/05694345221100710