Personal Income and Quality Purchase Income differentiation plays a central role to sustain product differentiation At low average income levels both firms have incentives to support a policy which aims at Increasing average income since such an increase Is profitable to both of them; beyond some level, such an increase is no longer profitable to the low quality producer since more customers are rich enough to abandon the standard product for the high qualit onePersonal Income and Quality Purchase • Income differentiation plays a central role to sustain product differentiation. • At low average income levels, both firms have incentives to support a policy which aims at increasing average income since such an increase is profitable to both of them; beyond some level, such an increase is no longer profitable to the low quality producer since more customers are rich enough to abandon the standard product for the high quality one