Short-Run Aggregate Supply

Short-run Aggregate Supply (SAS) shows the different quantities of real output in the short-run that will be supplied at different prices.  There are several things that affect the SAS curve. 

• The Effects of Price on the Short-Run Aggregate Supply Curve:   As price increases, the quantity supplied will also increase, indicating a postive relationship between price and quantity supplied.
  

• Other Things Besides Price that Effect Short-Run Aggregate Supply

The SAS curve is upward sloping because firms tend to increase price levels when demand increases and because in auction markets there are upward sloping supply curves.  There are two main theories to explain why the SAS curve is upward sloping and they are the sticky-wage model and the sticky-price model.