In deriving the demand schedule for a good, economists assume that
A) consumers have equal incomes to allocate among goods.
B) a consumer will allocate all of her income to one good.
C) all other influences on demand except the product price are held constant.
D) reported income changes at each point on the demand schedule.

Question

Quizplus · Accepted Answer

The assumption that all other influences on demand except the product price are held constant is crucial in deriving the demand schedule for a good. This assumption allows economists to isolate the effect of a change in price on the quantity demanded, which is necessary for constructing the demand schedule. The other options (A, B, and D) are not accurate assumptions for deriving the demand schedule.

In Deriving the Demand Schedule for a Good, Economists Assume