The "Other Things Being Equal" Clause in the Law of Demand

question 130

Multiple Choice

The "other things being equal" clause in the law of demand does not allow which of the following factors to change?

• A) Consumer income.
• B) The prices of other goods.
• C) Consumer tastes and preferences.
• D) All of these.

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Definitions:

Perfectly Competitive

A market structure where there are many buyers and sellers, all of whom have negligible impact on the market price.

Marginal Cost

The increment in total spending due to the manufacture of one more unit of a product or service.

Fixed Cost

Fixed Cost is a business expense that does not change with the level of goods or services produced within a certain period.

Variable Costs

Variable costs fluctuate with the level of output, increasing as production rises and decreasing as production falls.