Question

in order to study how a a change in market price for a good A effects purchases decisions for good A we must assume change in all other factors such as taste income and the price of other goods are constant is what as

Answer 1

According to the law of demand, the price of the goods and quantity demanded to have a negative relationship with each other, keeping other things like the income of the consumer, tastes, and preferences of the consumer and prices of other goods as constant. This assumption of keeping other things constant is called 'ceteris paribus'. Ceteris Paribus means keeping other things constant.

The Law of demand states a negative relationship between the price of the goods and quantity demanded because as the price of a good increase, the consumer tends to demand less of that good and vice versa.