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But nevertheless the measurement of welfare is now in

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Unformatted text preview: 11 Consumer Surplus (cont.) •  We have seen that a change in the price leads to a change in the consumer’s uGlity level. However, we don’t know what uGlity means. •  However, we can convert those changes in uGlity levels into income changes needed to achieve the level of uGlity either before or aher a price change: –  The change in income a consumer would need aher a price change in order to be just as well off as before the price change (CompensaGng VariaGon). –  The change in income a consumer would need before a price change in order to be just as well off as aher the price change (Equivalent VariaGon). Intermediate Microeconomics ECON*2310/Annen 12 4 12 ­09 ­19 Consumer Surplus (cont.) •  These are hypotheGcal income changes. •  But nevertheless: The measurement of welfare is now in monetary units. We have a welfare measure fo...
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