Recent literature finds evidence that prices decrease during demand peaks. This paper argues that the price decrease is … an artefact of ignoring product differentiation. We develop a simple individual demand model which shows that at periods … of exogenous high demand, consumers migrate towards cheaper lower quality products, pushing the average category price …

transformation function and demand parameters. The method relies on firm optimization conditions to obtain a one-to-one mapping …

framework and firm-level prices and quantities data for detailed products allowing us to both measure demand, and its changes …. This in turn allows us to measure how changes in TFP-Q, demand and markups ultimately affected revenue TFP, as well as …-recession is due to both a weakening of demand and a decreasing TFP-Q pushing down sales, markups, revenue TFP and labour …