445 Ch 7

445 Ch 7 - Product Variety and Quality under Monopoly 00:14...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Product Variety and Quality under Monopoly 00:14 When a firm offers a variety of product in response to different consumer tastes, it is  called  horizontal product differentiation When a first responds to differing consumer willingness to pay for a product’s quality by  offering different qualities of the same product is called  vertical product  differentiation. 7.1 A Spatial Approach to Horizontal Product Differentiation When a product sold differs in the distance traveled by the consumers, this is an  example of  horizontal product differentiation. 7.2 Monopoly and Horizontal Differentiation transportation costs are is ( t)  per unit of distance travel.  We assume that in each period each consumer is willing to buy exactly one unit of the  product sold by the monopolist provided that the price paid, including transportation  costs,  (Full Price)  is less that her reservation price 
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/23/2012 for the course ECON 445 taught by Professor Mcmanus during the Summer '08 term at UNC.

Page1 / 4

445 Ch 7 - Product Variety and Quality under Monopoly 00:14...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online