If the price of carrots drops, ceteris paribus, people will buy more carrots. Which statement BEST describes this phenomenon?
A) The relationship between the price of carrots and the number of carrots that people buy is independent of other things.
B) If carrots are the only available good, people will buy more of them if the price decreases.
C) If the price of carrots drops and everything else remains the same, the number of carrots people buy will increase.
D) As the price of carrots decreases, and all other prices decrease, then the quantity of carrots purchased will increase.

Question

Quizplus · Accepted Answer

Ceteris paribus means that all other factors are held constant. Therefore, if the price of carrots drops and everything else remains the same, the number of carrots people buy will increase. This phenomenon is described by the law of demand, which states that as the price of a good decreases (ceteris paribus), the quantity demanded of that good will increase.

If the Price of Carrots Drops, Ceteris Paribus, People Will