Perception of Product Quality in a Static State Utility Model

The role of the consumer′s perception of product quality within the traditional economic utility model is examined. It is argued that by holding marginal utility to be equal among buyers, price reference will be defined specific to the buyer′s marginal utility of money. Price is “understood” by the buyer in terms of perceived quality. The article proceeds to discuss an actual price quantity relationship – implied by the theory – the price quantity data were researched from the theatre market.