When resource prices are negotiable,the long-run aggregate supply curve is represented by:

A) an upward-sloping line
B) a downward-sloping line
C) a vertical line at potential output.
D) a horizontal line at the actual price level.
E) a horizontal line at the expected price level.

Long-Run Aggregate Supply Curve

This curve shows the relationship between the overall price level and the total output produced in an economy when wages and resource prices fully adjust to changes, reflecting an economy’s maximum sustainable output level.

Potential Output

A measure of the highest level of economic output an economy can sustain over a period without increasing inflation; synonymous with potential GDP.

Negotiable

Referring to something that can be discussed or altered through negotiation, such as terms of a contract or a financial instrument.