PRESENTATION OUTLINE
Definition-
It is the assumption that other factors are kept constant while investigating a particular relationship.
Meaning-
A Latin phrase meaning "with other things the same" or "all other things being equal or held constant".
Example-
An increase in the price of beef will result, ceteris paribus, in less beef being sold to consumers.
Example-
If people substitute between bananas and apples and the price of apples rise, then CETERIS PARIBUS the demand for bananas will rise.
Why do scientist use it?
They like to isolate relationships between one independent variable and one dependent variable.
Differences
ceteris paribus laws is the focus on universal laws is distinguishing fundamental physics as fundamental science, whereas ceteris paribus laws are predominant in most other sciences as special sciences, whose laws hold in special cases.
How does the it affect a demand curve?
Maximum per-unit price that consumers are prepared to pay for a given quantity of a good when all other variables affecting demand are held constant.
