What is one characteristic of short run aggregate supply?

One characteristic of short-run aggregate supply is that it is influenced by input costs. In the short run, firms are able to change the quantity of goods they produce in response to changing prices, but they also face constraints such as costs of raw materials, wages, and other inputs. When input costs increase, the aggregate supply curve shifts to the left, indicating a decrease in supply at all price levels. Conversely, if input costs decrease, the aggregate supply can shift to the right, indicating an increase in supply.

This interaction between input costs and the ability of firms to adjust production levels is fundamental in the short-run aggregate supply model. Changes in input prices, such as oil prices or labor costs, directly impact production decisions and output levels, thereby influencing overall economic activity. Understanding this relationship is crucial when analyzing economic conditions and the effects of policy changes or external shocks on the economy.