Suppose the price level falls but suppliers only notice that the price of their particular product has fallen Thinking there has been a fall in the relative price of their product they cut back on production, This is a demonstration of the ?

A. misperceptions theory of the short run aggregate supply curve
B. classical dichotomy theory of the short run aggregate supply curve
C. sticky price theory of the short run aggregate supply curve
D. sticky wage theory of the short run aggregate supply curve

Correct Answer: misperceptions theory of the short run aggregate supply curve ✔

Last Updated: June 18, 2019