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

Question

Quizplus · Accepted Answer

When constructing a supply schedule, the assumption is made that only price and quantity vary, and all other determinants of supply, such as technology, input costs, and government policies, are held constant. This assumption allows for a clear understanding of the relationship between price and quantity supplied.

A Key Assumption Made When a Supply Schedule Is Constructed