-In the above figure, the economy is at point A. Then the price level rises to 120 while the money wage rate remains constant. Firms will be willing to supply output equal to
A)$13.0 billion.
B)more than $13.0 billion.
C)less than $13.0 billion.
D)Without more information, it is impossible to determine which of the above answers is correct.

Question

-In the above figure, the economy is at point A. Then the price level rises to 120 while the money wage rate remains constant. Firms will be willing to supply output equal to
A)$13.0 billion. 
B)more than $13.0 billion. 
C)less than $13.0 billion. 
D)Without more information, it is impossible to determine which of the above answers is correct.

Quizplus · Accepted Answer

When the price level rises and the money wage rate remains constant, firms experience higher profitability, leading them to increase output beyond the initial level.

-In the Above Figure, the Economy Is at Point A Then