The Price Level Rises More Rapidly as the Maximum Output

question 207

Multiple Choice

The price level rises more rapidly as the maximum output level is approached along an aggregate supply curve because

• A)profit-taking firms are exploiting their market size and power.
• B)of the profit incentive.
• C)the costs of additional units of aggregate output begin to rise more rapidly,causing firms to seek higher prices to cover these rising costs.
• D)None of the choices are correct.

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Definitions:

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Chesapeake

A region in the United States centered around the Chesapeake Bay, known for its unique cultural heritage and history, including early colonial settlements.

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A geographical region in the northeastern corner of the United States, comprising six states and known for its colonial history, educational institutions, and distinct seasons.

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