-In the above figure,the economy is at point A.Then the price level rises to 110 while the money wage rate remains constant.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 rises to 110 while the money wage rate remains constant.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 rises and the money wage rate remains constant, firms experience an increase in profitability, which incentivizes them to supply more output.

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