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31 December, 04:06

The short run aggregate supply curve was constructed assuming that as the price of outputs increases, the price of inputs stays the same. How would an increase in the prices of important inputs, like energy, affect aggregate supply?

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  1. 31 December, 05:35
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    as higher input prices makes output less profitable decreasing the desired supply this is shown graphically as leftward shift in AScurve
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