and services, meaning that they would only purchase a riskier product if it were cheaper.
Indifference curves must also be downward sloping. Similar to labor markets, the inter-
action of firms and consumers generates a price function where consumers sort along
the function based on their valuations of safety and firms sort along the function based
on their abilities to produce safe products. In equilibrium, the hedonic price function
represents an upper envelope of isoprofit curves and a lower envelope of indifference
curves (profit expands and utility falls as price rises), meaning the slope of the ...
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