A positively sloped aggregate supply curve reflects
A)The idea that greater production lowers profit margins,which raises quantity demanded.
B)The decrease in the real value of money as the price level rises.
C)The rising costs associated with increased capacity utilization.
D)None or the other choices.

Question

Quizplus · Accepted Answer

A positively sloped aggregate supply curve indicates that as the price level rises, firms increase production, but at a higher cost due to rising resource costs, increasing their marginal cost of production. This increasing cost per unit of output due to increasing resource costs leads to a positively sloped aggregate supply curve.

A Positively Sloped Aggregate Supply Curve Reflects