When are firms willing to change the aggregate quantity of output supplied based on price?
A) In the short run only
B) In the long run only
C) In the short and long run
D) Price never affects the quantity that firms supply.

Question

Quizplus · Accepted Answer

In the short run, firms are willing to change the aggregate quantity of output supplied based on price due to factors like fixed costs and capacity constraints. In the long run, prices do not affect the quantity supplied as firms can adjust all inputs and reach a new equilibrium.

When Are Firms Willing to Change the Aggregate Quantity of Output