The short-run aggregate supply curve slopes a. downward becasue firms can sell m

Question

The short-run aggregate supply curve slopes a. downward becasue firms can sell more, and hence, will prodcue more when prices are lower b. downward because firms find it costs less to purchase labor and other inputs when price are lower, and hence they produce more c. upwards becasue when the price level rises, output prices rise relative to input prices (costs), raising profit margins and increasing prodcution and sales d. upward becasue firsm find it cots more to purchase labor and other inputs when prices are higher, and hence they must produce and sell more in order to make a profit

Explanation / Answer

Option C is correct.

Shortrun supply curve is upward because in short run if price changes upward producer supply more to earn extra profit. And since it is short run price of input donot response so quickly.

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