b) Short-run and long-run AS

c) the relationship between short-run and long-run AS

short-run = the time period where at least one factor of production is fixed

  • COP decreases

    • SRAS increases’

    • SRAS curve shifts right

  • COP increases

    • SRAS decreases

    • SRAS curve shifts left

long-run = the time period where all factors of production are variable

  • quantity/quality of FOP decreases

    • LRAS decreases

    • LRAS curve shifts left

  • quantity/quality of FOP increases

    • LRAS increases

    • LRAS curve shifts right