The Short-Run Aggregate Supply Curve Is Upward Sloping in Part

question 30

True/False

The short-run aggregate supply curve is upward sloping in part because increases in aggregate demand cause some firms to increase their price markups.

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Definitions:

Incentives

Rewards or motivations offered to encourage specific behaviors or actions by individuals or organizations.

Price Discrimination

The strategy of selling the same product at different prices to different groups of consumers, based on willingness to pay.

Discount Retailers

Stores that offer products at lower prices by accepting lower margins in return for a high sales volume.

Arbitrage

The practice of taking advantage of price differences between markets to make a profit.