Personal Income and Quality Purchase Two firms producing brands with different qualities quality level k-H and quality level k=L,(h>L Two consumers: consumer 1 with high income 11, and consumer 2 with low income 12 where 1>12>0 Each consumer buys only one unit of the product The utility level of consumer i, 1=1, 2 is given by H(I-pH) if he buys the high-quality brand s L(-pl if he buys the low-quality brand. (121) For given prices, the marginal utility of quality rises with an increase in the consumer's incomePersonal Income and Quality Purchase • Two firms producing brands with different qualities: quality level k = H and quality level k = L, (H > L > 0). • Two consumers: consumer 1 with high income I1, and consumer 2 with low income I2, where I1 > I2 > 0. • Each consumer buys only one unit of the product. The utility level of consumer i, i = 1, 2 is given by • For given prices, the marginal utility of quality rises with an increase in the consumer's income