S Equivalent Utility gains The dollar equivalent net utility gain for the 1st gallon is S( - pG) and is $(r2-p) for the 2nd gallon, c and so on so the dollar value of the gain-to-trade is $(r1-po)+$(r2-po)+ for as long as rn -pG>0
◆The dollar equivalent net utility gain for the 1st gallon is $(r1 - pG) ◆and is $(r2 - pG) for the 2nd gallon, ◆and so on, so the dollar value of the gain-to-trade is $(r1 - pG) + $(r2 - pG) + … for as long as rn - pG > 0. $ Equivalent Utility Gains
S Equivalent Utility gains ◆Sor1+….+rn- pgn will be the dollar equivalent of the total change to utility from consuming n gallons of gasoline at a price of $pG each
◆So r1 + … + rn - pGn will be the dollar equivalent of the total change to utility from consuming n gallons of gasoline at a price of $pG each. $ Equivalent Utility Gains
S Equivalent Utility gains (s)Res Reservation price Curve for gasoline Values pG 5 6 23456 Gasoline(gallons)
$ Equivalent Utility Gains Reservation Price Curve for Gasoline 0 2 4 6 8 10 Gasoline (gallons) ($) Res. Values 1 2 3 4 5 6 r1 r2 r3 r4 r5 r6 pG
S Equivalent Utility gains (S)Roe Reservation Price Curve for Gasoline Values pG 5 6 23456 Gasoline(gallons)
$ Equivalent Utility Gains Reservation Price Curve for Gasoline 0 2 4 6 8 10 Gasoline (gallons) ($) Res. Values 1 2 3 4 5 6 r1 r2 r3 r4 r5 r6 pG
S Equivalent Utility gains (S)Res. Reservation Price Curve for Gasoline Values s value of net utility gains-to-trade pG 5 6 6 Gasoline(gallons)
$ Equivalent Utility Gains Reservation Price Curve for Gasoline 0 2 4 6 8 10 Gasoline (gallons) ($) Res. Values 1 2 3 4 5 6 r1 r2 r3 r4 r5 r6 pG $ value of net utility gains-to-trade