Which of the Following Is Consistent with an Increase in the Quantity

Multiple Choice

Which of the following is consistent with an increase in the quantity of output supplied, according to the misperceptions theory?

A) The price level increases less than expected so that firms believe the relative price of their output has increased.
B) The price level increases less than expected so that firms believe the relative price of their output has decreased.
C) The price level increases more than expected so that firms believe the relative price of their output has increased.
D) The price level increases more than expected so that firms believe the relative price of their output has decreased.