What is the Short Run Aggregate Supply curve and why is it upwards sloping?

Aggregate Supply is the total amount of real output produced in an economy in a given year. The Short Run Aggregate Supply (SRAS) curve looks as aggregate supply in the short run: the time period where all resource prices (wages and prices of factors of production) are constant. In the short run, the curve has an upwards slope: a positive relationship between the general price level and GDP. This is due to profitability, as if the price level increases when other factor prices are held constant, firms profits increase leading them to increase their output, represented by an upwards movement along the SRAS curve.

PD
Answered by Parth D. Economics tutor

7587 Views

See similar Economics IB tutors

Related Economics IB answers

All answers ▸

Explain one reason why governments impose indirect taxes.


What is the difference between a COD and a COI?


Explain why scarcity results in economic decisions being made.


Explain the effect on GDP of an expansionary monetary policy (10)


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences