In the short run,the price level
A) will increase if unit costs increase.
B) will increase if average markup decreases.
C) will increase if unit costs decrease.
D) is held constant by government decree.
E) will decrease if there is a negative supply shock.

Question

Quizplus · Accepted Answer

In the short run, the price level will increase if unit costs increase because firms will have to increase their prices to maintain their profit margins.

In the Short Run,the Price Level