Why does the short run aggregate supply curve slope upward?
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...
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