Aggregate Supply: Short Run and Long Run

Aggregate Supply (AS) represents the total quantity of goods and services that producers in an economy are willing and able to supply at each given price level. While Aggregate Demand shows the spending side of the economy, Aggregate Supply captures the production side. The distinction between Short-Run Aggregate Supply (SRAS) and Long-Run Aggregate Supply (LRAS) is one of the most important analytical frameworks in A-Level economics — and one of the most contested.

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Defining Aggregate Supply

Concept	Definition
Aggregate Supply (AS)	The total output of goods and services that all producers in an economy are willing and able to supply at each price level in a given time period
Short-Run Aggregate Supply (SRAS)	AS when at least some factor prices (especially wages) are fixed or sticky — typically assumed to be a period of up to two years
Long-Run Aggregate Supply (LRAS)	AS when all factor prices have fully adjusted to changes in the price level — representing the economy's full productive capacity

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Short-Run Aggregate Supply (SRAS)