Please excuse me, I hardly know anything about economics yet.
When the quality of a product changes, the demand curve moves. But what if there are different versions of a product, of varying qualities, on the market at the same time? Is there standard way to model this?
For example, there are a lot of different restaurants of different qualities. The quality is a subjective measure, but suppose it weren't. I could draw one supply curve and one demand curve per restaurant. Is there anything more interesting I could do? For example something that takes account of the fact that a high-quality restaurant and a low-quality restaurant are to some extent substitutes for each other. Does micro theory give any prediction about what the supply of different restaurants of different qualities will be?
If there's a better question like this that I could have asked, or a good keyword to search on, please tell me.