The correct answer is A) the price level and aggregate demand.
The position of the long-run aggregate supply (LRAS) curve is determined by the price level and aggregate demand.
When talking about economics, aggregate supply is the entire supply of goods and services that companies plan to sell in a determined period at a given price in that economy. This Aggregate supply establishes the relationship between the price level and the production of the market. In simpler terms, the aggregate supply is the entire sum of goods and services provided at a given price and in the graphic intersects with the aggregate demand to decide the balance quantity provided and price.
