Question:

Why is the supply curve for public goods upward sloping?

Answer:

A change in the price level (for example brought about by a shift in AD) results in a movement along the short run aggregate supply curve. The slope of SRAS curve depends on the degree of spare (under-utilised) capacity within the economy.

Semantic Tags:

Consumer theory Supply and demand Long run and short run IS/LM model AD-AS model Aggregate supply Demand Supply Economics Macroeconomics
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