Why is the aggregate-supply curve upward sloping in the short run?
A) because people buy less when prices go up
B) because prices adjust fast to balance supply and demand
C) because wages adjust fast to stabilize standards of living
D) because some producers believe that only the price of their product has changed

Question

Quizplus · Accepted Answer

In the short run, the aggregate-supply curve is upward sloping because not all producers immediately realize that prices have changed across the board; some might believe that the price of their specific product has changed relative to others. This misperception can lead to an increase in production, as producers think they are now getting relatively more for their product.

Why Is the Aggregate-Supply Curve Upward Sloping in the Short