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