Please enable JavaScript.

Coggle requires JavaScript to display documents.

Aggregate Supply - Coggle Diagram

- - - - An increase in retirement age
        
        This will increase the size of the labour force and so supply increase
      - More women entering the labour force
        
        This will increase the size of the labour force and so supply increase
      - Net immigration
        
        If the immigrants are of working age, this will increase the size of the labour force
      - Discovery of new resources
        
        The discovery of new oil fields or gold mines can increase a country's productive potential
      - Net investment
        
        If total investment exceeds depreciation there will be additions to the capital stock.
      - Land reclamation
        
        The land could be use to built houses, hotels, marinas, theme parks and beaches.
- - - - The cost effect
        
        Even though the cost of resources is unchanged in the short run, average costs might increase (overtime pay, recruitment costs etc.) PRoducers will require higher prices to cover these extra costs.
      - The misintepretation
        
        Producers might think they are getting paid more for their products because it is becoming more popular and as a result they are encouraged to produce more.
      - The profit effect
        
        As price level increases and the cost of production does not change, the difference between cost and revenue increases, resulting in more profit, motivating firms to produce more.
    - - A change in the price of factors of production such as an increase in wage rates will cause the curve to shift to the left.
      - A change in factor productivity/quality of resources such as an increase in labour productivity will cause an increase in aggregate supply both short run and long run
      - A change in taxes on firms such as a reduction in corporation tax or indirect taxes will cause an increase in the short run aggregate supply