The Slope of the Short-Run Aggregate Supply Curve Can Be

question 21

Multiple Choice

The slope of the short-run aggregate supply curve can be explained by

• A) the fact that all prices are sticky in the short run.
• B) sticky input prices and flexible output prices.
• C) flexible input prices and sticky output prices.
• D) the fact that all prices are flexible in the short run.
• E) the fact that all prices except wages are flexible in the short run.

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Definitions:

Economic Order Quantity

A formula used to determine the most efficient order size that minimizes the total cost of inventory management, including ordering and holding costs.

Production Order Quantity Model

An inventory management method used to determine the optimal order quantity that minimizes the total holding and ordering costs.

Setup Cost

The cost incurred to prepare equipment or a process for production, including the cost of adjusting machinery and the labor cost of setting up.

Holding Cost

Cost associated with maintaining inventory over a period of time, including storage, insurance, and opportunity costs.