The AS-curve is horizontal or very flat if
A)additional resources (especially labor)can be hired to produce additional output with little or no increase in existing prices
B)wages fall rapidly with an increase in unemployment, reducing spending and income to restore equilibrium
C)firms lower wages less than prices to avoid a loss in profit during a recession
D)the nominal wage adjustment occurs fairly rapidly
E)nominal wages and prices always change proportionally, leaving the real wage rate unchanged

Question

Quizplus · Accepted Answer

The AS-curve is horizontal or very flat when additional resources, especially labor, can be hired to produce additional output with little or no increase in existing prices. This means that the firm can increase its output without facing higher costs, hence the AS-curve is flat.

The AS-Curve Is Horizontal or Very Flat If