Economy, asked by nikhatj5597, 1 year ago

What do you mean by compensation variation, explain the hicks consumer surplus re?

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Answered by Anonymous
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It measures the amount of money a consumer would pay to avoid a price change, before it happens. When the good is neither a normal good nor an inferior good, or when there are no income effects for the good, then EV (Equivalent variation) = CV (Compensating Variation) = ΔCS (Change in Consumer Surplus)

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