The economy's aggregate supply (AS)curve is assumed to slope upward because
A)inputs become more expensive at higher levels of output.
B)inputs become less expensive at higher levels of output.
C)firms' unit costs rise as output increases.
D)firms' unit costs fall as output increases.
E)aggregate demand increases at higher levels of national income.

Question

Quizplus · Accepted Answer

The aggregate supply curve slopes upward because, as output increases, firms often face higher costs due to factors like overtime pay, resource scarcity, or inefficiencies, leading to rising unit costs.

The Economy's Aggregate Supply (AS)curve Is Assumed to Slope Upward