The short-run aggregate supply curve slopes upward because of all of the followi

Question

The short-run aggregate supply curve slopes upward because of all of the following reasons except: A. in the short run, prices of final goods and services adjust slowly due to the existence of menu costs. B. in the short run, an unexpected change in the price of an important resource can change the cost to firms. C. in the short run, as prices of final goods and services increase, input prices react more slowly. D. in the short run, as prices of final goods and services increase, some firms are very slow to adjust their prices, thus their sales increase.

Explanation / Answer

Correct Answer:

B. in the short run, an unexpected change in the price of an important resource can change the cost to firms.

Explanation:

In the short run, increase in prices are adjusted slowly, either for products or input factors as explained by option A, C and D.

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