The Purpose of the Ceteris Paribus Assumption Used in Economic

question 79

Multiple Choice

The purpose of the ceteris paribus assumption used in economic analysis is to:

• A) Avoid making normative statements
• B) Distinguish macroeconomics from microeconomics
• C) Make sure that all relevant factors are considered
• D) Focus on the effect of a single factor on a certain variable

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Definitions:

Yield Management

A pricing strategy used in industries with fixed capacities, such as hotels and airlines, to maximize revenue through the manipulation of prices based on demand.

Variable Costs

Costs that vary directly with the level of business activity.