The short-run aggregate supply curve represents circumstances where:
A) both input and output prices are fixed.
B) both input and output prices are flexible.
C) input prices are fixed,but output prices are flexible.
D) input prices are flexible,but output prices are fixed.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve represents circumstances where input prices (such as wages and raw material costs) are fixed in the short run, but output prices are flexible. This means that changes in demand or other economic factors can affect the level of output that firms are willing to supply at a fixed cost of inputs.

The Short-Run Aggregate Supply Curve Represents Circumstances Where