According to neoclassical theory,the aggregate supply curve is horizontal at the prevailing price level.

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According to neoclassical theory, the aggregate supply curve is upward-sloping, meaning it is positively correlated with the price level. This is because producers are willing to supply more goods and services as prices rise, as they are able to earn higher profits. Therefore, the aggregate supply curve is not horizontal at the prevailing price level.

According to Neoclassical Theory,the Aggregate Supply Curve Is Horizontal at the Prevailing