A Reply to W. D. Macmillan

We are grateful to Macmillan for pointing out a flaw in the diagrammatic representation of our argument and for providing a more formal confirmation of its conclusion. From his remarks it is obvious that our Figure 2'showing Hicksian consumer surplus should have been drawn as follows (Fig. 2'): for a farmer located at di, ul is the greatest utility he can achieve, and it calls for a certain level of outlay on transport. The curve U2 is the utility level which could be achieved if no consumption of transport services was necessary. Thus, by definition, toV represents the amount of money available for the consumption of transport: