Question

I need two real-life examples of Ceteris Paribus violations. Why they are violations and for the supplier or demander. Cannot be oil, or diamond markets

Answer 1

Typically ceteris paribus means other things being constant. In economics this is the very common pheonomenon use as assumptions. We can not measure effect of one variable on other variable without taking other variables constant. This is because other things can also effect the results therefore to study the effect of one thing on another we assume that other things that can also effect are constant.

Examples: one example we take from normal commodity market where law of demand applies and we assume that if price of one commodity goes up its demand goes down keeping other factors constant.  

We can take the example of Yippee noodles. Now it is sold at 10₹ in Indian market. Suppose the price of yippee rises to 11₹ but still the demand remains same and it does not go down even if the prices are increased it means other factors are manipulating the results and voilating the ceteris paribus which means other factors like price of substitute goods like maggie are increasing more than price of yippee so consumers are finding it still cheaper. Here other factors are playing major role.

Another real life example we can take from science. If we want to measure when we apply heat to the water how much steam is generated. In this we are measuring the effect of heat on the quantity of steam is generated. But can we say only heat is variable to measure the amount of steam? Well no. It is the quality of water that matters. If water is salty, it will effect the amount of steam. So other factors are also playing their role. And voilate the ceteris paribus. Which means we can not assume that other things do not effect the results. Their effects are always there.

These are the voilations for the supplier and consumer because these factors effect the supply and purchasing decision. They can not consider the same thing while making decisions. They need to consider the other external factors .