Aggregate supply increases when:
A) input prices rise.
B) subsidies are reduced.
C) there is a decrease in firms' market power.
D) business expectations tend toward the negative.

Name: Aggregate supply increases when: A) input prices rise. B) subsidies are reduced. C) there is a decrease in firms' market power. D) business expectations tend toward the negative.
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Question

Quizplus · Accepted Answer

A decrease in firms' market power can lead to increased competition, which can drive firms to produce more, thus increasing aggregate supply.

Aggregate Supply Increases When