The economy's aggregate supply (AS)curve shows the relationship between the
A)price level and the marginal propensity to consume (MPC).
B)price level and the total output that firms wish to produce and sell, as technology and input prices vary.
C)equilibrium real GDP and marginal cost.
D)equilibrium real GDP and desired consumption.
E)price level and the total output that firms wish to produce and sell, with technology and input prices held constant.

Question

Quizplus · Accepted Answer

The aggregate supply (AS) curve shows the relationship between the price level and the total output that firms wish to produce and sell, with technology and input prices held constant. This can be illustrated as a positive relationship, with higher prices leading to higher levels of output as firms seek to increase their profitability. The AS curve is typically upward-sloping in the short run, but may become more elastic in the long run as firms have more time to adjust their production processes and input costs.

The Economy's Aggregate Supply (AS)curve Shows the Relationship Between the