A Note On Consumer Surplus With Quality Variation

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A Note On Consumer Surplus With Quality Variation
Rajnish Mehra
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), the quality vector q and income m, By definition (t). (p, q, m. ) = max u . {d^ (q^), d2(q2) » • • • jdj^Cq^^) ] N subject to I p . (q . )d . (q . ) < m . . ■ — ■iJJJj -^ When we are dealing with a single individual the index i will be dropped. IV) The Marshallian demand of individual i for commodity j is represented by J^jCp. Q. M. ). In the interest of simplicity we will suppress variables that are constant, so that whenever we consider prices and qualities of goods other than J fixed, we will write d (p, q, m ) as d (p^. Q^. M. ) or when there is no ambiguity, simply as d . The demand curve d is assumed Co be dif f erentlable with respect to p and q . V) It is assumed that there exists a price p. Such that d.. (p*q, m ) " for all 1 (i = 1, 2, ... T) i. E. For each kind of conmodity j and all individuals i there exists a price (p. ) independent of the quality such that Che demand for that commodity is zero. 3. Consumer Surplus with Quality Variation; variation in the quality and quantity of one commodity (j) .

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