Final answer:
The 'all else held constant' or ceteris paribus assumption is crucial in economics for analyzing the impact of a single factor, such as price, on the quantity demanded while holding other factors constant.
Option 'd' is the correct.
Step-by-step explanation:
The "all else held constant" assumption, known as the ceteris paribus assumption, is fundamental in economics, particularly when constructing demand and supply curves. This assumption facilitates economists to isolate the effects of only one factor, such as price, on the quantity demanded, by presuming that all other relevant economic factors remain unchanged.
Thus, if we state that an increase in the price typically reduces the quantity consumers will buy, this is under the ceteris paribus assumption that factors like income or preferences do not change.
However, in reality, if all variables are not held constant, then the laws of supply and demand may not apply as expected due to the interaction of various factors.
Given this context, the correct answer to the student's question is option (a): makes it possible to study how a change in only the price affects the quantity demand. This principle is critical in separating and understanding the individual effects of various factors on economic outcomes.