The XYZ Co.sells shirts.Shirts with the company label on the tag are perceived to be of higher quality than shirts with the store's label.Yet,shirts are of identical quality regardless of label.The demand for perceived high-quality shirts is p_h = 50 - q_h.The demand for perceived low-quality shirts is p_l = 10 + p_h - q_l.The firm can produce shirts at TC = q_h + q_l.How many shirts does the firm label as low quality and how many as high quality? What prices are charged?

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The Answer of The XYZ Co.sells shirts.Shirts with the company label on the tag are perceived to be of higher quality than shirts with the store's label.Yet,shirts are of identical quality regardless of label.The demand for perceived high-quality shirts is p_h = 50 - q_h.The demand for perceived low-quality shirts is p_l = 10 + p_h - q_l.The firm can produce shirts at TC = q_h + q_l.How many shirts does the firm label as low quality and how many as high quality? What prices are charged?