Short run aggregate supply
Definition. Short run aggregate supply shows the total quantity of real output that firms in an economy are willing to produce at each general price level when at least one input, typically the money wage rate, is fixed. The curve is usually upward sloping because higher prices raise profit margins while wages lag.
A change in input costs, such as wages or imported raw material prices, shifts this curve. It contrasts with long run aggregate supply, which depends on the economy productive capacity rather than the price level.
This term belongs to Inflation in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
Want to use short run aggregate supply for marks in the exam? Learn it in class or message the team.