Davis, Lucas W.; Kahn, Matthew E. - 2009
market. In particular, as income
increases, old goods must become relatively less expensive in order to maintain equal
demand for both quality levels.
When the … market is opened to trade in new goods, prices of new goods equalize
but the prices of old goods continue to adjust to maintain equal demand for both quality
levels … average
buyer in the market. For example, new entrants in the low‐income country will tend to
demand …