With short-run aggregate supply,
A)input prices are fixed or slower to change than output prices.
B)output prices are fixed or slower to change than input prices.
C)input prices are variable and change quickly.
D)output prices are not a consideration.

Question

Quizplus · Accepted Answer

Short-run aggregate supply assumes that input prices are fixed or slower to change than output prices. This means that in the short run, changes in demand will mainly affect the output level rather than input prices. This is because it takes time for input prices to adjust to fluctuations in demand.

With Short-Run Aggregate Supply