Short-Run Aggregate Supply (SRAS)

Short-Run Aggregate Supply (SRAS) represents the total value of goods and services that businesses in an economy are willing and able to produce at different price levels, assuming other factors stay constant. In the short term, factors like wages and raw material costs don’t change immediately, so as prices for goods increase, businesses typically supply more. Conversely, if prices fall, they produce less. SRAS curves upward because higher prices make it more profitable for firms to increase output temporarily. It reflects how supply responds to price changes in the short run before long-term adjustments, like wages and technology, come into play.