entrants and to discourage entry. The market consists of customer segments with different valuations for product quality. We … demonstrate that a higher quality and a higher price of each product in the line convey the firm's advantage to potential … from the line. When product quality change is costly, the superior incumbent continues to select a higher quality and price …

quality versions of the same product. Hence, our results suggest that, when the innate durability of a product is high, the … seller should offer different quality versions of the product. …