Under what circumstances would the SRAS be vertical?
A)if there was no profit effect
B)under no conceivable set of circumstances
C)if there was no misperception effect
D)if there was no profit effect or misperception effect

Question

Quizplus · Accepted Answer

The SRAS (Short-Run Aggregate Supply) curve would be vertical if there were no profit effect or misperception effect, as these are the factors that typically cause the SRAS to slope upwards. Without these effects, the SRAS would not respond to changes in the price level.

Under What Circumstances Would the SRAS Be Vertical