A positively sloped aggregate supply curve reflects
A)The idea that greater production lowers profit margins,which raises quantity demanded.
B)The decrease in the real value of money as the price level rises.
C)The rising costs associated with increased capacity utilization.
D)None or the other choices.

Question

Quizplus · Accepted Answer

A positively sloped aggregate supply curve reflects the rising costs associated with increased capacity utilization, meaning that as firms produce more, they experience higher costs such as increased wages or the need for more expensive inputs. This leads to a higher equilibrium price level and a higher level of output. Choices A and B are incorrect because they describe factors that would lead to a negatively sloped aggregate supply curve.

A Positively Sloped Aggregate Supply Curve Reflects