product performance

Product performanceclick for a larger image
Fig. 160 Product performance. An improvement in product quality from OQ1 to OQ2 can allow the firm producing the product to charge a higher price to reflect this improvement, increasing price from OP1 to OP2. If price is raised by only P1 P2, which is less than proportionate to the increase in product quality Q1Q2 (as in the figure), then the consumer receives a net benefit from product improvement.

product performance

an aspect of MARKET PERFORMANCE that denotes the quality and performance of existing products and firms’ records with respect to the development of new products. The introduction of new products and the qualitative improvement of existing products may enhance consumer welfare by providing consumers with ‘better-value-for-money’ in terms of price/quality trade-offs. See Fig. 160 . See also PRODUCT DIFFERENTIATION, TECHNOLOGICAL PROGRESSIVENESS, INVENTION, INNOVATION, RESEARCH AND DEVELOPMENT, PRODUCT LIFE CYCLE.
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