Abstract
The Alchian–Allen theorem of “shipping the good apples out” (the AA theorem) is based on a law of relative demand which states that as the price ratio of one good to another becomes larger, the demand for the former good becomes smaller relative to the demand for the latter good. However, both the AA theorem and the law of relative demand have only been discussed in the context where a commodity group has just two quality-differentiable versions. This paper defines relative demands and investigates their properties for the more general situation where a commodity group consists of more than two similar but quality-differentiable brands. The results obtained extend the AA theorem and the law of relative demand.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
