Question

Please give a new answer different to what's on the site already.

The Aggregate Supply (AS) curve slopes upward to reflect the profit motive of businesses. So, why are there two versions of the AS curve( i.e. short run and long- run). Discuss.

Answer 1

in short run there is chance for 3situation .they are zero profit,normal profit and super normalprofit.since in short run productionisless compared to longrun,so when price increase the sellers will get increase in profit, because the variable factor in shortrun is only labour.

But in longrun supply isdetermined by various factors an inlong run theremustbe adjustment tendency in price and toreach equilibrium. so in longrun normalprofit chance ispossible.since capitaland labour etcare variable the output can be changed as what ever the demand and theprice. therexist time toproduce and supply

in short runno timeto produce and limietedproductionand supplyexist.soanincreseinprice makethe sellerstosell the entire goodwith maximum highestprice and earn profit..somehow supernormalprofitchancehigh tothe sellers.so AS curvr slope upwardmeans supply increasewith increseinprice, positive or direct relation exist in supply and price