Question

Suppose you build a model of the market for umbrellas, in which the predicted number of umbrellas sold by a shop depends on their colour and price, ceteris paribus. the colour and the price are variables used to predict sales. which other variables are being held constant?

Answer 1

Answer:

Quantity, location and weather

Explanation:

The concept of the ceteris paribus, is vital in economics as in the real world, it is generally hard to isolate all the variables that are different, and might change the result or outcome.

The ceteris paribus is the simplification, which include holding other things ( both outside as well as inside the model) constant. In this situation, all variables except price and the color are held constant. In this example, such as quantity, weather and location are held constant.