On what does the steepness of the short-run aggregate supply curve primarily depend?
A) on the length of time for which resource prices are fixed
B) on the length of time for which output prices are fixed
C) on the difference between the expected price level and the actual price level
D) on how quickly production costs increase as output expands

Question

On what does the steepness of the short-run aggregate supply curve primarily depend?  
A) on the length of time for which resource prices are fixed 
B) on the length of time for which output prices are fixed 
C) on the difference between the expected price level and the actual price level 
D) on how quickly production costs increase as output expands

Quizplus · Accepted Answer

The steepness of the short-run aggregate supply curve primarily depends on how quickly production costs increase as output expands. As output expands, production costs may increase due to factors like labor shortages and increased demand for raw materials, leading to a steeper slope on the short-run aggregate supply curve. The other options (A, B, and C) may also influence the position or shape of the curve, but they are not the primary factors determining its steepness.

On What Does the Steepness of the Short-Run Aggregate Supply