Okay I need to actually read the paper because production focusing on people who have a strong preference as opposed to those with a weaker one... Isn't that how it's supposed to to work? Idg not that's a source of inefficiency
It may be easier to think of this as a single good which the monopolist can vary in quality, like a computer chip. At the bottom, they need to drop quality to keep the people at the top from simply buying more of the good to compensate. So they don’t distort at the top, because the low demand people wouldn’t ever buy it, but do distort at the bottom.
Okay I need to actually read the paper because production focusing on people who have a strong preference as opposed to those with a weaker one... Isn't that how it's supposed to to work? Idg not that's a source of inefficiency
It may be easier to think of this as a single good which the monopolist can vary in quality, like a computer chip. At the bottom, they need to drop quality to keep the people at the top from simply buying more of the good to compensate. So they don’t distort at the top, because the low demand people wouldn’t ever buy it, but do distort at the bottom.