What is meant by ‘Ceteris Paribus’? What factors are covered under

1.	What is meant by ‘Ceteris Paribus’? What factors are covered under Ceteris Paribus condition in relation to law of demand?
Answer» A Latin term meaning “all other things constant” or “nothing else changes.” If the price of a good decreases, the quantity of it consumed increases, Ceteris paribus. This assumption is made to isolate the effects of a change in the factor under consideration. Factors which are covered under Ceteris Paribus are the following: Tastes and preferences Income of the consumer Price of related goods Expectations Number of consumers Government regulations.

What is meant by ‘Ceteris Paribus’? What factors are covered under Ceteris Paribus condition in relation to law of demand?

Answer»

A Latin term meaning “all other things constant” or “nothing else changes.” If the price of a good decreases, the quantity of it consumed increases, Ceteris paribus. This assumption is made to isolate the effects of a change in the factor under consideration.

Factors which are covered under Ceteris Paribus are the following:

Tastes and preferences
Income of the consumer
Price of related goods
Expectations
Number of consumers
Government regulations.

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What is meant by ‘Ceteris Paribus’? What factors are covered under Ceteris Paribus condition in relation to law of demand?

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