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Unformatted text preview: d = f (P, Ps, Y, N, Z). This explains that d, the quantity of a commodity demanded, functionally depends upon five different factors. In other words, any change in any one of these factors can result in a change in the quantity demanded. However, the marginal approach is partial in nature. It attempts to concentrate on any one of these factors at a time, in analyzing its effect. The rest of the factors are assumed to be constant . This is the implication of the Ceteris Paribus a condition which means other things remaining equal . If we want to concentrate on the isolated effect of changes in the price of the same good (P) on the quantity demanded, then this can be written as : d = f (P) [Ps, Y, N, Z]const. Here the second bracket, i.e. , serves as a Ceteris Paribus assumption in explaining the price-demand relation....
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- Fall '10