Research On The Absence Of Mid-quality Product

The classic quality theory divides the quality difference into vertical and horizontal differences.The product quality level in the vertical difference is different,and the quality is the difference between the advantages and disadvantages.The quality of products in the real economy varies widely.Similar or similar products often have different prices due to quality differences,and they also target different consumer groups.In the same product market,the quality of the product from low to high usually has three grades of low,medium and high.The question to be analyzed in this paper is why the products with medium quality are usually “disappeared” in the market compared to low-grade and high-grade quality products.The difference in the income level of consumers is usually an important factor that leads consumers to have different preferences for different quality products.These preference information are transmitted to the market and used by the manufacturers.In the product market,especially among product manufacturers with a certain monopoly power,preference information is very important to them,because according to the classic theory of price discrimination we will know that monopolists are very interested in understanding the willingness of each consumer to pay.And based on different willingness to pay,each consumer has a different price to hold as much consumer surplus as possible.However,this is sometimes very difficult.How then do the manufacturers distinguish different consumers?Differences in quality can help manufacturers solve this problem.Manufacturers can do this by formulating prices for different quality products that meet the conditions for incentive compatibility.In this process,mid-range quality products may disappear due to certain factors.The logic behind this lies in the behavior of manufacturers seeking profit maximization.This article uses the quality discrimination content in the theory of industrial organization to analyze the various factors that lead to the disappearance of mid-range quality products under the assumption of exogenous quality and endogenous quality.The purpose of writing this article is not to guide a policy,but to explain how real-world manufacturers choose the combination of pricing level and product quality,so as to know the intrinsic causes of certain perplexing phenomena.………...