Moving along the aggregate supply curve, when the price level rises, the
A)quantity supplied does not change because the aggregate supply curve is a vertical line.
B)the quantity supplied increases.
C)the quantity supplied decreases.
D)the aggregate demand curve shifts rightward.
E)the aggregate demand curve shifts leftward.

Question

Quizplus · Accepted Answer

As we move along the aggregate supply curve, the quantity supplied increases as the price level increases. This is because firms are willing to produce more at higher prices, as they can earn greater profits. The aggregate supply curve is upward sloping, not vertical, indicating that higher prices lead to higher output levels in the short run. Therefore, choice A is incorrect. Choices D and E are also incorrect, as they relate to changes in aggregate demand, which is a separate concept from aggregate supply.

Moving Along the Aggregate Supply Curve, When the Price Level