In the short run, the aggregate supply curve has a positive slope because, as the price level rises, producers can
A)produce the same output, but at higher prices.
B)accumulate inventories.
C)produce less in response to falling profits.
D)be compensated for the extra costs incurred to produce more output.
E)experience rising factor prices.

Question

Quizplus · Accepted Answer

In the short run, as the price level rises, producers are willing to supply more because they can cover the extra costs incurred to produce additional output, leading to a positive slope in the aggregate supply curve.

In the Short Run, the Aggregate Supply Curve Has a Positive