What is the shape of the modern short-run aggregate supply (SRAS) curve? Why?
What will be an ideal response?
The short-run aggregate supply curve is initially horizontal, then upward sloping. If the price level increases in the short run, some costs for firms stay constant. The higher product price leads to higher profits, and the firms expand production. Hence, aggregate output can increase in the short run.
Economics
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Total surplus or gains created from trade equal
a. Seller surplus b. Buyer surplus c. The summation of seller and buyer surplus d. Profits earned by a firm
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