Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

The Multiproduct Firm, Quality Choice, and Regulation

David Besanko, Shabtai Donnenfeld and Lawrence J. White
The Journal of Industrial Economics
Vol. 36, No. 4 (Jun., 1988), pp. 411-429
Published by: Wiley
DOI: 10.2307/2098447
Stable URL: http://www.jstor.org/stable/2098447
Page Count: 19
  • Download ($42.00)
  • Subscribe ($19.50)
  • Cite this Item
The Multiproduct Firm, Quality Choice, and Regulation
Preview not available

Abstract

A monopolist facing a market of heterogeneous consumers will distort the quality array. This paper explores three regulatory remedies--minimum quality standards (MQS), maximum price regulation (MPR), and rate of return regulation (RORR)--that counteract this distortion. MQS and MPR raise the quality offered to consumers with a low willingness-to-pay for quality. While MQS have no effect on the quality offered to consumers with a high willingness-to-pay, MPR decreases the quality offered to this group. If production of high- (low-)quality goods is capital-intensive, RORR increases (decreases) the quality offered to both groups.

Page Thumbnails

  • Thumbnail: Page 
411
    411
  • Thumbnail: Page 
412
    412
  • Thumbnail: Page 
413
    413
  • Thumbnail: Page 
414
    414
  • Thumbnail: Page 
415
    415
  • Thumbnail: Page 
416
    416
  • Thumbnail: Page 
417
    417
  • Thumbnail: Page 
418
    418
  • Thumbnail: Page 
419
    419
  • Thumbnail: Page 
420
    420
  • Thumbnail: Page 
421
    421
  • Thumbnail: Page 
422
    422
  • Thumbnail: Page 
423
    423
  • Thumbnail: Page 
424
    424
  • Thumbnail: Page 
425
    425
  • Thumbnail: Page 
426
    426
  • Thumbnail: Page 
427
    427
  • Thumbnail: Page 
428
    428
  • Thumbnail: Page 
429
    429