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AP® Macroeconomics

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Explain the Shape of SRAS

APMACR-AUNB9H

Which of the following statements best explains the shape of the short-run aggregate supply (SRAS) curve?

A

SRAS is upward-sloping because input prices are sticky in the short run, making it profitable to supply more goods at higher price levels.

B

SRAS is vertical because input prices are sticky in the short run, making it profitable to supply more goods at higher price levels.

C

SRAS is upward-sloping because all prices are flexible and can adjust quickly in the short run.

D

SRAS is downward-sloping because all prices are flexible and can adjust quickly in the short run.

E

SRAS is vertical because all prices are flexible and can adjust quickly in the short run.