Could the city/country discrepancy be because people in the country are less mobile than people in the city?
I reject the conclusion that higher quality does not result in higher prices. Lower prices aren't in all cases needed for profit--but they sure can't hurt.
Other considerations--the greedy algorithm of the market place they teach in microecon works well for well-behaved price vs. demand functions. Greedy algorithms certainly work just fine (provably fine) for 'well-behaved' functions. But they aren't so great once you add lots of other variables. Especially variables subjective to every person. There is apparently no way for the market to transmit information about consumer's quality preferences. And there is no other real way to honestly communicate with a large firm (yes, you could just tell the business "I want quality!", but the corporation has no way of knowing how much more consumers are willing to pay for it). Indeed, it's even hypothetical that large scale companies are incapable of providing quality uniformly--or even at all!
If quality is the true path to happiness, large scale organization of production, the basis of the Industrial Revolution, is totally unworkable. WATE THE MINUTE I'M THE PROXY THING I CAN"T SAY THAT HOLY CARP I MEAN QUALITY IS INEFFICIENT BYE_BYE GOT TO GO SEE YA;)!!~!11
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