A complete list of demand prices is not available
We are aware of a part only of the demand schedule. As we do not know what prices we arc prepared to pay fur everyone of the units, the whole of the consumer’s surplus cannot be ascertained. In actual life, however, we are concerned with that part of the demand schedule with which we arc fairly familiar. Reactions to small changes in prices arc fairly well known. In real life, we are not concerned with hypothetical scarcity prices. or unimaginably low prices
Necessaries. Consumer’s surplus, in the case of necessaries of life and conventional necessaries is definite and immeasurable. In case of necessaries of life as well as conventional necessaries. however. it is said that there is no positive satisfaction. In their case. there is only removal of pain rather than giving of pleasure. Patton calls it “pain economy”. Only when the necessaries of life have been satisfied can there be any idea of consumer’s surplus. It is to this stage which Patton calls “pleasure econometric consumer’s surplus belongs.
Consumer’s Circumstances, Some consumers arc rich while other. arc pour. A rich man is prepared
to pay much more for a thing than go without it. This difference in the consumer circumstances makes the measurement of cornerstone plus difficult and ill’ exact. This difficulty is met by the idea of average. When there is a large number of purchasers. rich and poor, the variations in individual circumstances may be ignored.
Consumer’s Sensibilities, Every consumer has his own tastes and sensibilities. Some desire a commodity more ardently than others, and are, therefore prepared to offer more. This difficulty is also met, as in the above case, by the idea of average. When we deal with consumers in the bulk, the individual tastes and sensibilities may be supposed to cancel themselves out.
Change in Marginal Utility of Money, As we go on buying a commodity, less and less amount or money is left with us. Hence, the marginal utility of each unit of money increases. But, when we measure consumer’s surplus, we do not make allowance for this change in the marginal utility of money. In reply to this objection, we may point out that, in actual practice, only small amounts if money arc spent on the purchase of individual commodities. The change in the marginal utility of money are, therefore, negligible.
Conclusion. We may, therefore, conclude by saving that the exact measurement of consumer’s surplus is impossible. Even so. the concept of consumer’s surplus is a useless one, In practical life, whether in business or in public finance, it is always possible to have a rough and workable idea about the measurement of consumer’s surplus, and that is what matters.
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