Questions: In the long run the aggregate supply curve will be vertical, diagonal, a V-shape, horizontal.
Transcript text: In the long run the aggregate supply curve will be $\qquad$
vertical
diagonal
a V-shape
horizontal
Solution
The answer is the first one: vertical.
Explanation for each option:
Vertical: In the long run, the aggregate supply curve is vertical because it represents the economy's maximum sustainable output, which is determined by factors such as technology, resources, and institutions. This level of output is not affected by changes in the price level, hence the vertical shape.
Diagonal: A diagonal aggregate supply curve would imply that output changes proportionally with the price level, which is not consistent with long-run economic theory. In the long run, output is determined by real factors, not price levels.
A V-shape: A V-shaped aggregate supply curve is not a recognized concept in economic theory. The aggregate supply curve does not exhibit a V-shape in either the short run or the long run.
Horizontal: A horizontal aggregate supply curve would imply that the price level does not change with changes in output, which is characteristic of the short-run aggregate supply curve under certain conditions (e.g., perfectly elastic supply). However, in the long run, the aggregate supply curve is vertical.
Summary:
In the long run, the aggregate supply curve will be vertical because it reflects the economy's potential output, which is independent of the price level.