The assumption of the upward sloping supply curve may not hold when _____.
A)wages are low
B)wages are high
C)unemployment is low
D)unemployment is high

Question

Quizplus · Accepted Answer

The upward sloping supply curve assumes that as wages increase, firms are willing to produce more output. However, if unemployment is low, there may be a shortage of workers, causing firms to struggle to produce more output with the same amount of labor. In this case, the supply curve may not slope upward.

The Assumption of the Upward Sloping Supply Curve May Not