-In the Above Figure Point a Is the Original Consumption

Multiple Choice

-In the above figure point A is the original consumption point.The movement from point A to point C is due to a fall in the price of good Y.Note that B¹,B²,and B³ are budget constraint lines with incomes M¹,M²,and M³ respectively.Also note that B² and B³ are parallel.Calculate the compensating variation (CV) .

A) CV = M³ - M¹.
B) CV = M³ - M².
C) CV = M¹ - M².
D) CV = M¹ - M³.