Ceteris Paribus

Categories: Home -> Dictionary

Last updated: 2026-08-01

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Ceteris paribus is a Latin phrase that means "all else constant" or "other things being equal".

It is used a great deal in economics to study a single cause and its effect, without other factors getting in the way.

How it is used in economics

Isolating a variable:

It allows one to see how a single change affects another.

For example, if the price of milk rises, people are expected to buy less milk (ceteris paribus, that is, if wages and tastes do not change).

Explaining simple rules:

It helps create models that are easy to understand, such as the law of supply and demand in books or graphs.

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Categories: Home -> Dictionary

Last updated: 2026-08-01

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