The slope of the short-run aggregate supply curve shows that:
A) as overall price levels increase, firms are willing to produce more.
B) as overall price levels decrease, firms are willing to produce more.
C) firms are constrained to a certain level of output in the short run, regardless of the price.
D) firms are constrained to a certain price in the short run, regardless of level of output.

Question

Quizplus · Accepted Answer

In the short run, as overall price levels increase, firms are typically willing to produce more because higher prices can lead to higher profits, assuming costs remain constant.

The Slope of the Short-Run Aggregate Supply Curve Shows That