Vertical Long-Run Aggregate Supply Curve
The graph above depicts the long-run aggregate supply (LRAS) curve as vertical. What does this vertical LRAS curve indicate?
A
The vertical LRAS indicates that aggregate demand will also be vertical in the long run.
B
The economy is operating at full capacity and cannot produce more output even when demand increases.
C
The long-run aggregate supply is fixed, so the price level cannot change regardless of demand fluctuations.
D
In the long run, the economy’s output is determined by its resources and technology rather than the price level.
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