The relationship between the level of prices and the total quantity of goods and services that firms supply in the short- run is:
A) positive.
B) negative.
C) marginally decreasing.
D) similar in the long run and in the short run due to the existence of sticky prices.

Question

Quizplus · Accepted Answer

In the short run, there is a positive relationship between the level of prices and the total quantity of goods and services that firms supply, as higher prices can lead to increased production due to higher profit margins.

The Relationship Between the Level of Prices and the Total