One reason why the quantity of real output supplied rises with the price level,ceteris paribus,is because profits are higher.

Question

Quizplus · Accepted Answer

When the price level rises, the cost of inputs such as labor and materials also typically increase. However, firms may be able to pass on these increased costs to consumers through higher prices. This leads to higher profits for firms, which can incentivize them to increase their output in order to take advantage of the higher prices and profits. Therefore, the quantity of real output supplied may rise with the price level, ceteris paribus.

One Reason Why the Quantity of Real Output Supplied Rises