Login

Welcome, Guest. Please login or register.

September 06, 2025, 02:49:18 pm

Author Topic: Aggregate Supply  (Read 1283 times)  Share 

0 Members and 1 Guest are viewing this topic.

manutd

  • Adventurer
  • *
  • Posts: 24
  • Respect: 0
Aggregate Supply
« on: April 25, 2018, 03:32:07 pm »
0
I'm having trouble understanding the concept of aggregate supply. Can someone explain how changes of general level of prices, quantity and quality of factors of production, cost of production, technological change, productivity growth, exchange rates and climatic conditions impact AS.
Would be great if someone attached resources/notes for this topic   8) :o ;D :D :D :D :D :D :D :D :D

Cranium002

  • Forum Regular
  • **
  • Posts: 55
  • Respect: +1
Re: Aggregate Supply
« Reply #1 on: April 25, 2018, 08:41:55 pm »
0
Those are just factors of AS. By the book, AS refers to the total value of goods and services that are available for sale in an economy over a set period. Basically:

Factors affecting the quantity and quality of productive resources and their availability – As this factor increases, firms can increase supply. For example, if there a discovery of resources that firms have more access to those resources. However, if there is a drought than firms in the agricultural market will struggle to supply goods and services.

Factors affecting the costs of production and profits – If production costs are lowered, or profits are increased then firms will be more willing to supply goods and services. This is due to firms wanting to make as much profit as they can, so when costs are at their minimum, they will capitalise.

Factors affecting efficiency and productivity – As efficiency and productivity increase, firms are more able to increase supply. Advances in technology might allow productivity per hour worked to boost, which also lowers the average costs per unit.