The aggregate supply curve is
A) vertical in the short run
B) horizontal in the short run
C) the sum of all of the supply curves of individual firms in the economy
D) downward sloping in the short run
E) upward sloping in the short run

Question

Quizplus · Accepted Answer

The aggregate supply curve is upward sloping in the short run, meaning that as the price level increases, firms are willing to supply more output. This is because in the short run, prices of factors of production are fixed, so firms can increase their profits by producing more at higher prices.

The Aggregate Supply Curve Is