What Is the Aggregate Supply Curve?
Aggregate supply (AS) is an economics term that refers to the complete supply of goods and services that companies in a national economy will sell at a specified price level and point in time. An aggregate supply curve graphically depicts these relationships. A point graph uses the x-axis to represent aggregate supply of products and uses the y-axis to represent price levels. Analysts plot two types of aggregate supply curves, a short-run curve and a long-run curve. In the short term, price level increases will stimulate production due to increased revenues that producers can get for their products. In the long run, the increase in prices that producers receive for their final products is totally offset by the proportional increase in the costs that sellers pay for raw materials, labor and capital inputs.
