Aggregate supply (AS)
Aggregate supply is described in an AD-AS model by the AS curve. The AS-curve is a straight line with a positive slope that describes the relationship between
supply and price level when all other factors are held constant.
Aggregate supply is the total supply of products in a country. Aggregate supply depends on the price level, the aggregate supply is higher when prices are higher.
The AS curve has a positive slope because the marginal costs of companies increases with increasing volume and companies are only interested in selling more quantity of products when prices exceed the marginal cost.
aggregate supply, macro theory, economics