The Short-Run Aggregate Supply Curve Slopes Upward Because

question 97

Multiple Choice

The short-run aggregate supply curve slopes upward because:

• A)​firms normally can purchase some inputs at prices that are temporarily fixed in the short run.
• B)​firms seek maximum profits and always try to increase output in the short run.
• C)​firms purchase inputs that increase in price as the price level rises in the short run.
• D)​All of the above are correct.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Output Level

The quantity of goods or services produced by a company, industry, or economy within a certain period.

Total Costs

The total of all costs associated with the creation of goods or services, encompassing both constant and fluctuating expenses.

Maximizing Profits

The process of adjusting inputs and outputs in production or service delivery to achieve the highest possible financial gain.