If we use "ceteris paribus" when plotting a demand curve for the price of canned beans, what is assumed to be constant? a. The price of a can of beans. b. The price of a can of tomatoes. c. The number of cans of beans supplied. d. The costs of production of a can of beans.

Question

Kody Gray

Business

13 September, 23:56

If we use "ceteris paribus" when plotting a demand curve for the price of canned beans, what is assumed to be constant? a. The price of a can of beans. b. The price of a can of tomatoes. c. The number of cans of beans supplied. d. The costs of production of a can of beans.

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Answers (1)

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Tyler Hammond · Answer 1

All except 'a' i. e The price of a can of beans

Explanation:

Demand Curve is the graphical representation of quantities of a good demanded at different prices, other factors remaining constant (ceteris paribus).

The curve is downward sloping due to inverse relationship between price & quantity demanded, as per law of demand. Change in price defines quantity demanded movement on the curve itself. Any change in factors other than price shifts the curve altogether.

In this case : Determining demand curve of 'Canned Beans' - would be based only on relationship between their quantity demanded & their own i. e canned beans price. All other factors - tomato can price, their cost of production, their supply are held constant as per 'ceteris paribus'.