Monopolist's Rapid Product Changes Serve Whole Market, Low-Quality Goods Sold Below Costs
The article explores how a company selling different qualities of durable goods to low- and high-income buyers can maximize profits. If the company can quickly change prices and products, they can serve the whole market immediately. Low-quality goods might be sold below costs. These findings differ from those for non-durable goods or single-quality durable goods. The study also discusses how limited product versions work differently for durable and non-durable goods.