Ceteris Paribus

Ceteris Paribus is an important concept in economics. Ceteris Paribus is Latin and means all other things being equal. When analyzing complex things, it is difficult to change many factors simultaneously and understand the effects that these changes give.

When analyzing things in economics we usually only change one factor and assume that all other factors are as they were before. If you, for example, want to analyze demand in a market, you start off with a few fundamentals and then change one factor, such as income, and check how this change affects demand. All other conditions are assumed to be unchanged. Ceteris Paribus assumes that various factors or conditions do not affect each other.