SRAS is sometimes drawn as a steep curving line. Why is the curve steep? What happens...

SRAS is sometimes drawn as a steep curving line. Why is the curve steep? What happens when the curve eventually points upwards?

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Expert Solution

Curve is steep because the price of the input in the market is rising at a high rate, primary reason for this can be most of the resources in the market are getting employed at this point. The less the free availabel resources in the market the more steep the curve will be, at the point where none of the resources are left free and more resources cannot be employed the curve will point upward, it means all the resources in the market are used.

Rahul Sunny answered 1 year ago

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