The aggregate supply curve is:
A) upward sloping because costs of production increase as real output increases.
B) horizontal because producers sell their output at fixed prices.
C) downward sloping because lower prices call for higher output to maintain revenues.
D) vertical because the economy's output is fixed in the short run.

Question

Quizplus · Accepted Answer

The aggregate supply curve is upward sloping because, as the real output increases, the costs of production also tend to increase, leading firms to raise prices.

The Aggregate Supply Curve Is