If the price level is P1 the option B) short-run aggregate supply curve will shift up (to the left) in the long run to restore equilibrium.
In the short run, aggregate supply is known to act to higher demand and prices and this is often done by increasing the use of the present inputs in the process or acts of production.
Note that In the short run, the capital level is said to be fixed, and a company will not be able to introduce a new technology to boast production efficiency.
Note also that Equilibrium is seen as the a state of been balance or a stable scenario and as such, If the price level is P1 the option B) short-run aggregate supply curve will shift up (to the left) in the long run to restore equilibrium.
See full question below
Refer to the graph shown. If the price level is P1 the:
A) aggregate demand curve will shift to the left in the long run to restore equilibrium.
B) short-run aggregate supply curve will shift up (to the left) in the long run to restore equilibrium.
C) short-run aggregate supply curve will shift down (to the right) in the long run to restore equilibrium.
D) aggregate demand curve will shift to the right in the long run to restore equilibrium.
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