In constructing the short-run aggregate supply curve, how would an economist define the short run?
A) a period during which the price level is constant
B) a period during which output is fixed
C) a period during which profit is constant
D) a period during which the costs of some resources are fixed

Question

In constructing the short-run aggregate supply curve, how would an economist define the short run?  
A) a period during which the price level is constant 
B) a period during which output is fixed 
C) a period during which profit is constant 
D) a period during which the costs of some resources are fixed

Quizplus · Accepted Answer

In the short run, the costs of some resources are fixed, meaning that firms cannot adjust their production levels in response to changes in prices. Therefore, the short-run aggregate supply curve is upward sloping, reflecting the fact that output can only increase as firms use their existing resources more intensively. Choices A, B, and C do not accurately define the short run in relation to aggregate supply.

In Constructing the Short-Run Aggregate Supply Curve, How Would an Economist