-In the above figure,the economy is at point A.Then the price level falls to 90 while the money wage rate does not change.Firms will be willing to supply output equal to
A) less than $13.0 trillion
B) $13.0 trillion
C) more than $13.0 trillion
D) Without more information, it is impossible to determine which of the above answers is correct.

Question

-In the above figure,the economy is at point A.Then the price level falls to 90 while the money wage rate does not change.Firms will be willing to supply output equal to
A) less than $13.0 trillion 
B) $13.0 trillion 
C) more than $13.0 trillion 
D) Without more information, it is impossible to determine which of the above answers is correct.

Quizplus · Accepted Answer

When the price level falls and the money wage rate remains unchanged, firms face higher real wage costs, leading to reduced profitability. Consequently, firms will be willing to supply less output than before, which is less than $13.0 trillion.

-In the Above Figure,the Economy Is at Point A