Why does the short run aggregate supply curve slope upward?

Expert Answers info

pohnpei397 eNotes educator | Certified Educator

calendarEducator since 2009

write35,413 answers

starTop subjects are History, Literature, and Social Sciences

There are three major reasons why the short run aggregate supply curve (SRAS) slopes upward.

First, it does so because resource prices are sticky and it can be easier for firms to reduce production than to reduce costs when the price level drops.   If the price a firm can charge for its products drops, it will want to reduce its costs.  It might, for example, want to reduce wages.  But workers will not be likely...

(The entire section contains 218 words.)

Unlock This Answer Now


check Approved by eNotes Editorial