Suppose an economist says that "Other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that:
A)the quantity of bananas purchased determines the price of bananas.
B)all factors other than the price of bananas (for example, consumer tastes and incomes) are assumed to be constant.
C)economists can conduct controlled laboratory experiments.
D)one cannot generalize about the relationship between the price of bananas and the quantity purchased.

Question

Quizplus · Accepted Answer

The statement is referring to the law of demand, which states that as price decreases, quantity demanded increases, holding all other factors constant (ceteris paribus). Therefore, the statement assumes that all other factors, such as consumer tastes and incomes, are constant.

Suppose an Economist Says That "Other Things Equal, the Lower