Question

In Law of Demand, CETERIS PARIBUS
assumption does NOT include which of
the following
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Answer 1

Answer:

(a) Ceteris paribus: Other things remaining unchanged, we analyse only the effect of a change in the price of a commodity on the quantity demanded of a commodity. All other determinants of demand and the set of conditions remains unchanged.

(a) Ceteris paribus: Other things remaining unchanged, we analyse only the effect of a change in the price of a commodity on the quantity demanded of a commodity. All other determinants of demand and the set of conditions remains unchanged.(b) Sunk Capital: Sunk capital is that capital, which can be used to produce only one type of commodity or service, for example, an ice factory and an oil mill uses capital only to produce ice and oil respectively and no other commodity.

(a) Ceteris paribus: Other things remaining unchanged, we analyse only the effect of a change in the price of a commodity on the quantity demanded of a commodity. All other determinants of demand and the set of conditions remains unchanged.(b) Sunk Capital: Sunk capital is that capital, which can be used to produce only one type of commodity or service, for example, an ice factory and an oil mill uses capital only to produce ice and oil respectively and no other commodity.(c) Product Differentiation: Under monopolistic competition, the products of different firms are not homogeneous but are close substitutes. Products are differentiated from each other in terms of brand name, colour, shape, quality etc.