2.3.1: The Characteristics of AS

Question 1

What is aggregate supply?

Answer 1

-Aggregate supply is the total supply of goods and services
produced within an economy at a given overall price in a given period.

Question 2

Why is AS curve upward sloping?

Answer 2

• AS is the combined supply of all individual supply curves in an economy which are also upward sloping.
• As real output increases, firms have to spend more to increase production. Increased costs result in higher average prices