A short-run aggregate supply curve shows fixed ______, and a long-run aggregate supply curve shows fixed ______.
A) output; output
B) prices; prices
C) prices; output
D) output; prices

Question

Quizplus · Accepted Answer

In the short run, firms adjust production based on changes in prices, but in the long run, they have the ability to adjust all factors of production, including output levels, leading to a fixed output and variable prices. Therefore, a short-run aggregate supply curve shows fixed prices and a long-run aggregate supply curve shows fixed output levels.

A Short-Run Aggregate Supply Curve Shows Fixed ______, and a Long-Run