Refer to the graphs to the right. Which of the following statements best describes the supply side of Economy A? O A. Firms are producing well below their capacity and are willing to produce more only if prices rise. Unit costs are rising rapidly as firms are producing beyond their capacity. Firms will produce more only if prices increase. C. Unit costs are rising, but firms can produce more output by employing standby capacity and overtime labour, for example, with no increase in the price level. B. D. Firms are producing well below their capacity and are willing to produce more output with no increase in price. Price Level Price Level Economy A AS Real GDP Economy B Real GDP AD -AS AD

Refer to the graphs to the right. Which of the following statements best describes the supply side of Economy A? O A. Firms are producing well below their capacity and are willing to produce more only if prices rise. Unit costs are rising rapidly as firms are producing beyond their capacity. Firms will produce more only if prices increase. C. Unit costs are rising, but firms can produce more output by employing standby capacity and overtime labour, for example, with no increase in the price level. B. D. Firms are producing well below their capacity and are willing to produce more output with no increase in price. Price Level Price Level Economy A AS Real GDP Economy B Real GDP AD -AS AD

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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