Abstract
When a consumer faces a price change under a given nominal income, his utility (or real income) level as well as his demand vector changes. Suppose, however, that his income level is simultaneously changed as the price is changed so as to keep his utility at the initial level. This operation may be regarded as a compensation for the price change, and we call the resulting demand vector the compensated demand for the new price.
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Hatta, T. (2018). Compensated Demand. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_242
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DOI: https://doi.org/10.1057/978-1-349-95189-5_242
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