Short-Run Aggregate Supply (SRAS)

Short-run aggregate supply (SRAS) shows the total planned national output firms are willing and able to supply at different overall price levels when factor productivity and input costs (like wages and technology) are held constant. The SRAS curve is upward sloping because higher prices allow firms to increase output in the short run (for example by using labour overtime), and the curve shifts when non-price determinants such as labour costs, raw material prices, taxes or exchange rates change.