Principles of Macroeconomics / Unit 8 MAC 0706 short lesson, about 20 seconds
Short-Run Aggregate Supply
Captions available
The idea
The short-run aggregate supply curve shows the quantity of output firms produce at each price level. It slopes up, because with input prices fixed a higher output price raises profit.
In practice
Its slope changes: nearly flat far to the left, steeper in the middle, nearly vertical at the right.
Where people slip
The curve is drawn holding input prices, capital, resources and technology constant.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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