If costs decrease, what happens to the aggregate supply curve?
A) It shifts rightward.
B) It shifts leftward.
C) Prices move up along the curve.
D) Prices move down along the curve.
E) There is no change.

Question

Quizplus · Accepted Answer

When costs decrease, firms are able to produce more output at any given price level, which means they can offer more goods and services at the same price or lower prices. This leads to an increase in aggregate supply, which is represented by a rightward shift in the aggregate supply curve.

If Costs Decrease, What Happens to the Aggregate Supply Curve