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

question 57

Multiple Choice

The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT

• A) consumer income.
• B) the price of the good concerned in the law of demand.
• C) the prices of substitutes.
• D) tastes and preferences.

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Definitions:

Economic Profit

The difference between a firm's total revenues and its total costs, including both explicit costs and opportunity costs.

Perfectly Competitive

A market structure where many firms sell identical products, entry and exit are easy, and no single seller can influence the market price.

Market Price

The present cost for purchasing or selling an asset or service within a specific market.

Minimum-Cost Output

The level of production at which a firm can produce goods at the lowest possible average total cost.