An important assumption that is made when constructing a supply schedule is
A) only price and quantity matter in determining supply.
B) firms always want to sell a certain amount of a product.
C) supply is too important to be left to the marketplace.
D) all other determinants of supply are held constant.
E) demand has a positive slope.

Question

Quizplus · Accepted Answer

When constructing a supply schedule, all other determinants of supply are held constant, such as the cost of inputs, technology, and expectations about the future price of the good. This assumption allows us to examine how changes in price affect the quantity supplied, ceteris paribus.

An Important Assumption That Is Made When Constructing a Supply