In macroeconomic theory, which is not justification for taking the price level as fixed.

Option 1 -> If the law of diminishing returns doesn't apply, firms can produce more output without rising costs, justifying fixed prices.

Option 2 -> With unused resources (unemployment, idle capacity), output can expand without price pressures, justifying the fixed price assumption.

Option 3 -> When additional output doesn't increase marginal cost, there's no cost pressure to raise prices, justifying fixed price levels.

Option 4 -> This states that prices vary when quantity changes, which contradicts the assumption of fixed prices.

Hence, Option 4: When the quantity produced changes, price does vary -> This is NOT a justification for taking the price level as fixed because it explicitly states that prices change with quantity changes. In short-run Keynesian models, we assume fixed prices when there are idle resources and output can expand without cost/price pressures. If prices vary with quantity, this contradicts the fixed price assumption used in analyzing economies with unemployment and spare capacity -> correct