Answer:
Supply curve vs Aggregate Supply
Step-by-step explanation:
- Supply express a direct relationship between what producers supply and how that relationship affects the price of a specific product or service. Hence, expresses a linear increase - or a constant slope
- Aggregate supply are the total supply in an economy at a particular period of time and a particular price threshold. Aggregate supply is an economy's gross domestic product (GDP), the total amount a nation produces and sells.
- Aggregate supply convey how much firms are willing to produce at a specific price point.
- Aggregate supply is a response to increasing prices that drive firms to utilize more inputs to produce more output. The incentive is that if the price of inputs remains the same but if the price of outputs increase, the firm will generate larger profits and margins by producing and selling more. The aggregate supply curve is represented by a curve that slopes upward, which indicates that as the price per unit goes up, a firm will supply more. Increasing slope - Not constant.
- The supply curve eventually becomes vertical, indicating that at a certain price point a firm cannot produce anymore, as they are limited by certain inputs, e.g. number of employees and number of factories.
