Illustrate Other Things Equal revisited in Supply
Illustrate “Other Things Equal” Revisited in Supply and Demand, and Equilibrium?
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Remember that the “laws” of supply and demand depend on the assumption that the “other things” or “determinants” of demand and supply are constant. Confusion results if “other things” (determinants) change and one does not take this into account. For example, sometimes more is demanded at higher prices because incomes rise, but if that fact is ignored, the law of demand seems to be violated. If income changes, however, there is a shift or increase in demand that could cause more to be purchased at a higher price. In this example not remain constant is “other things”.
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