Consumer Welfare
Definition
Consumer welfare refers to the overall well-being of consumers in terms of their satisfaction and benefit from consuming goods and services. It takes into account factors like quality, affordability, choice, and access.
Analogy
Think of consumer welfare as going on a shopping spree with unlimited funds. You can buy all your favorite clothes at affordable prices without worrying about any limitations or restrictions.
Related terms
Price elasticity of demand: Price elasticity of demand measures how sensitive consumer demand is to changes in price.
Income effect: The income effect is the change in quantity demanded due to changes in purchasing power resulting from changes in income levels.
Utility maximization: Utility maximization is the concept that individuals aim to maximize their total satisfaction or happiness when making consumption choices.
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