All explanations for the upward slope of the short-run aggregate supply curve suppose that the quantity of output supplied increases when the actual price level exceeds the expected price level.

Question

Quizplus · Accepted Answer

The upward slope of the short-run aggregate supply curve is based on the idea that, when the actual price level is higher than what producers expected, they will increase production because they perceive the prices of their products to be rising relative to their costs, leading to higher profits.

All Explanations for the Upward Slope of the Short-Run Aggregate