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Arte-miy333 [17]
3 years ago
11

Suppose an economist says that "other things equal, the lower the price of bananas, the greater the amount of bananas purchased.

" This statement indicates that ________.
A) Economists can conduct controlled laboratory experimentsB) The quantity of bananas purchased determines the price of bananasC) All factors other than the price of bananas (for example, consumer tastes and incomes) are assumed to be constantD) One cannot generalize about the relationship between the price of bananas and the quantity purchasedE) The economist has ignored the "King Kong" effect on bananas
Social Studies
1 answer:
V125BC [204]3 years ago
8 0

Answer:

C) All factors other than the price of bananas (for example, consumer tastes and incomes) are assumed to be constant

Explanation:

When developing an economic model, only a limited number of variables can be taken into account for the sake of simplicity and understanding. Economic models never give a full picture of reality, only an approach.

The economic model alluded in the question is perhaps the most famous of all: the supply and demand model. It tells us that, assuming all else constant, the higher price, the less quantity is demanded, and the lower the price, the more quantity is demanded.

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