The misperception theory describes the slope of the SRAS curve. Basically, it says that as the price level rises, firms might increase their production in the short run if Question 10 options: the nominal wage they pay their employees was set based on the expected (lower) price level, so real wages are relatively low. production appears more profitable. they believe that the price of their product has risen relative to the price of other products, when in fact the rise in the price of their product reflects an increase in the general price level. All of the above are correct