The general shape of the short-run aggregate supply curve is:
A)upward sloping.
B)downward sloping.
C)vertical.
D)horizontal.
E)uncertain.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve is upward sloping because as prices increase, firms are willing to supply more output due to higher profit margins. However, there is a limit to how much output firms can produce in the short run, so the curve eventually becomes less steep as it approaches the maximum output level.

The General Shape of the Short-Run Aggregate Supply Curve Is