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Incorporating Quality-Differentiated Demand into the Undergraduate Microeconomics Core

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  • Charles F. Adams

Abstract

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.

Suggested Citation

  • Charles F. Adams, 2023. "Incorporating Quality-Differentiated Demand into the Undergraduate Microeconomics Core," The American Economist, Sage Publications, vol. 68(2), pages 326-335, October.
    • Handle: RePEc:sae:amerec:v:68:y:2023:i:2:p:326-335
    DOI: 10.1177/05694345221100710
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    References listed on IDEAS

    as
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    3. Charles F. Adams, 2022. "Too Much of a Good Thing: Quality-Differentiated Demand and Monopoly Bias," The American Economist, Sage Publications, vol. 67(1), pages 123-131, March.
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    8. Charles F. Adams, 2021. "Quality-Differentiated Demand and the Analytics of Disruption," The American Economist, Sage Publications, vol. 66(2), pages 315-322, October.
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